Analysis of the Impact Effect of Corporate ESG Performance

ESG, as a projection of the concept of sustainable development in the corporate world, is a powerful tool for implementing the concept of high-quality development and realizing the goal of "double carbon". As the importance of stakeholders to enterprises is becoming more and more prominent, enterprises need to pay attention to the effects of ESG performance on different stakeholders in order to realize long-term sustainable development. This paper empirically analyzes the effects of corporate ESG performance based on different stakeholder perspectives using panel data of A-share listed companies in Shanghai and Shenzhen from 2011 to 2021. It is found that better ESG performance can significantly reduce the inefficient investment of enterprises; high ESG scores can significantly enhance the reputation of enterprises; and enterprises carrying out ESG practice activities are conducive to achieving better environmental performance. Therefore, firms should improve ESG governance and fully consider stakeholders' expectations and needs when making strategic and operational decisions to achieve long-term sustainable development; governments and regulatory agencies should strengthen the supervision and incentives for firms' ESG performance.