ESG Information Disclosure and Corporate Financial Restatement

Environmental, Social, and Governance (ESG) factors are closely tied to the sustainable development of corporations and have become an increasingly important indicator for evaluating corporate sustainability, attracting growing attention from society at large. This paper examines the relationship between ESG information disclosure and financial restatement using data from A-share listed companies on the Shanghai and Shenzhen stock exchanges from 2009 to 2021. The empirical results suggest that, to a certain extent, enhanced ESG disclosure can reduce the likelihood of financial restatements. Heterogeneity tests reveal no significant differences between state-owned and non-state-owned enterprises. Further analysis indicates that ESG disclosure can increase investor attention, which in turn helps curb financial restatement behavior. Moreover, institutional investors play a moderating role in the relationship between ESG disclosure and financial restatement. These findings suggest that increasing ESG information disclosure can help listed companies reduce financial restatements and promote sustainable corporate development.