Analysis of the Financial Performance of CNOOC under the Perspective of ESG

Since the late 20th century, climate change and related environmental problems have become increasingly prominent. As the worlds second-largest economy, China has actively taken on social responsibilities. In the 14th Five-Year Plan, China proposed the dual carbon goals. As the main entities of social production, it is particularly important for enterprises to take their environmental and social responsibilities as well as improve governance levels, which often affect the business outcomes of enterprises. This paper studies the financial performance of petroleum from the perspective of Environment, Social and Governance (ESG). Based on the analysis of literature and public data, a case study of China National Offshore Oil Corporation (CNOOC) is conducted. The purpose is to examine the applicability in practical situations of conclusions drawn by existing empirical research regarding the relationship between ESG and enterprise financial performance. The paper finds that CNOOC has effectively enhanced its financial performance and operational capabilities through proactive actions in environmental protection, social responsibility, and corporate governance. Although the ESG practices with such a high-standard may limit the companys growth potential in the short term, by improving transparency and demonstrating enterprises social responsibility, ESG practices indirectly promote the enterprises financial performance, including the improvement of management efficiency, boost in investor confidence, expansion of financing channels, and enhancement in consumer trust, thereby enhancing the enterprises profitability and reinvestment capabilities.