The Impact of Corporate ESG Ratings on Debt Financing Ability

During the phase of high-quality development, the significance of the environmental, social, and governance (ESG) performance of firms on their debt financing capability is paramount. This study utilizes a two-way fixed-effects model to investigate the impact of corporate ESG ratings on debt financing ability based on the data of A-share listed companies from 2013 to 2023. It is found that improving corporate ESG ratings can enhance corporate debt financing ability. More specifically, optimizing ESG ratings can further strengthen the ability to finance the debts of enterprises by enhancing corporate value and promoting corporate green innovation. Furthermore, compared with state-owned enterprises, ESG ratings have a more obvious effect on reducing the cost of debt financing for non-state-owned enterprises. Building upon this research, the paper offers comprehensive recommendations for governments, enterprises, and investors. The government should strengthen the standardization of the ESG rating system and promote the disclosure of high-quality ESG information by enterprises to reduce their financing costs; enterprises should pay attention to ESG performance and increase their financing capacity by improving their environmental, social, and governance performance; and investors should incorporate the ESG performance of enterprises into their investment decisions to obtain long-term value.