The Impact of the Carbon EmissionsTrading Policy on the Corporate ESGPerformance – Evidence from China

Based on a sustainable development perspective, this study examines the impact of China's carbon emissions trading policy on corporate environmental, social, and corporate governance (ESG) performance.Data from 845 listed companies in China from 2011 to 2020 are used, and differences-indifferences (DID) and triple-difference models are adopted.The empirical results show that implementing carbon emissions trading policies significantly enhanced corporate ESG performance.According to the triple-difference model, as internal drivers, two different corporate sustainability indicators focus on different moderating roles in the relationship between carbon emissions trading policy and corporate ESG performance.The external driving factor (i.e., the regional digital economy's development level) positively moderates the relationship between carbon emissions trading policy and corporate ESG performance.Further analysis shows that larger companies and state-owned enterprises achieve more significant improvements in ESG performance under carbon emissions trading policy.