The Impact of ESG Performance on Stock Market Volatility

With the restructuring of China's economy, Environmental, social and governance (ESG) investment concepts are rapidly developing in China. Under the strategic framework of the dual-carbon goal, ESG responsibility is not only an indispensable component, but also a necessary way for enterprises to realize financial risk prevention and control, promote green development and enhance effectiveness. The study takes the data of Chinese A-share listed companies from 2013 to 2023 as the research sample, and analyzes the impact of ESG performance on share price changes of listed companies. The study finds that good ESG performance represents stronger risk management capabilities in terms of environment, social responsibility and governance structure, which in turn significantly reduces market volatility. Based on this finding, an ESG disclosure system should be established and optimized in accordance with China's national conditions, so as to guide enterprises to assume ESG responsibilities rationally. In the process of ESG transformation, the importance of internal supervision and risk management should be emphasized to ensure the soundness of ESG transformation, so as to provide strong support for the green transformation and sustainable development of China's economy.