Enterprise ESG Excellence through the Lens of Investors’ Attention: Perspective of Polluting and Non-Polluting Firms

ESG is a key package for enterprise change and sustainable development. Recently, many investors have taken ESG as an essential part of their capital budgeting decisions and given it importance. Investors are more likely to invest in the capital market but pay minimum attention to ESG practices because of the time and energy limitations. This article uses empirical methods to examine investor attention's impact on business ESG performance. All 100 companies from the Shanghai Stock Exchange between 2015 and 2024 are chosen as the research sample for this study. There are 1000 observations as a result of the application of selection criteria. Drawing on previous research (Tang & Zhu, 2017), this study uses the Internet search index for listed businesses revealed in the CNRDS database as a proxy variable (InvAtt) to quantify the degree of investor attention to listed companies precisely. Empirical data show that investor attention can significantly enhance the ESG standards of publicly traded corporations. According to additional analysis, investor attention substantially impacts ESG performance in private enterprises and high-polluting companies. The findings of this investigation add to and enhance the body of knowledge in corporate ESG studies. Additionally, they offer policy implications and theoretical support for listed businesses looking to develop their ESG investment philosophies and procedures. The study suggests that regulatory authorities should improve investor guidance and encourage listed companies to implement ESG standards.