The Dual Leverage and Mechanism of ESG Information Disclosure on Investor Behavior

Abstract: With the global emphasis on sustainable development, ESG information disclosure has become a key factor for investors to assess corporate value and risk. The academic value of this paper lies in an in-depth analysis of the reverse effect, which is not mentioned in most literature. It stands from the perspective of investors' investment purposes and interests, the attitudes of long-term investors who desire sustainable development and short-term investors who only care about immediate returns in a short period when facing ESG information disclosure. On the other hand, there are negative impacts on investors due to reasons such as government policy standards or the level of corporate ESG information disclosure itself, which may also prevent investors from achieving their expected goals, leading to investment risks and ultimately investors may flow out of the company. At the same time, some external factors can also lead to a dual leverage effect, such as the economic slowdown caused by the pandemic.