Earnings Pressure and Firms’ ESG Performance: Do Executive Environmental Experience and MBA Experience Matter?

On the basis of agency theory and upper echelons theory, this study examines the moderating role of executive experience in the relationship between earnings pressure and firms’ environmental, social, and governance (ESG) performance. We argue that earnings pressure negatively impacts ESG performance, as it leads executives to prioritize short-term financial gains over ESG activities with uncertain or delayed financial returns. Moreover, we posit that executives with environmental experience are less likely to reduce ESG efforts under earnings pressure, whereas those with MBA backgrounds are more inclined to do so. Using a fixed effects model, we empirically analyze data from Chinese listed manufacturing firms (2010–2021), finding strong support for these hypotheses. This research enhances our understanding of ESG performance under earnings pressure and offers valuable insights for promoting sustainable corporate development.