Study on the Impact of ESG Ratings on Bond Issuance Credit Spreads in China

With the increasing severity of global environmental issues and challenges, investors are increasingly recognizing the importance of non-financial factors such as corporate social responsibility and environmental impact in sustainable investment strategies. ESG (Environmental, Social, and Governance) investment strategies have therefore become mainstream in international markets. This study constructs a multiple linear regression model to analyze the effect of ESG evaluations on bond issuance credit spreads, utilizing data from China’s credit bond market from 2021 to 2024. The paper further investigates the mediating effects of return on equity (ROE) and credit ratings by applying a two-step regression analysis to explore the pathways through which ESG evaluations impact credit bond spreads in China. The findings indicate a significant negative relationship between ESG evaluations and credit spreads, with ROE performance and institutional credit ratings acting as mediators.