The Financial Impacts of Green Certifications and ESG Scores in China’s Manufacturing Sector

This study examines the financial impacts of green certifications, such as ISO14001 and ISO9001, and the moderating role of ESG scores in China's manufacturing sector. Using panel data from 1,101 firms between 2018 and 2023, the results reveal that ISO14001 certifications significantly reduce financial performance in the short term due to high compliance costs. However, firms with higher environmental dimension scores partially mitigate these negative effects. The analysis also highlights temporal shifts, with the financial impact of ISO14001 weakening over time as firms adapt to certification requirements. In contrast, the financial benefits of ISO9001 certifications declined during the same period. Despite these insights, the study identifies inconsistencies in ESG rating methodologies and a focus on short-term financial outcomes as limitations. These findings provide actionable insights for policymakers and industry leaders to enhance the adoption and financial viability of sustainable practices in emerging markets.