How do institutional investors evaluate ESG? Evidence from survey and archival data in China

This study examines how institutional investors evaluate corporate ESG performance in emerging markets, using surveys and archival data. We find that investors are more sensitive to ESG performance below the 60th percentile of peers, with limited sensitivity to improvements beyond this point. Both risk and stock return are more affected by ESG performance within this lower range, especially among short-term investors. The results suggest that value-driven considerations, rather than ethical motives, guide institutional investors’ attitudes toward ESG, highlighting the importance of managing ESG expectations and balancing improvements under resource constraints.

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Publication Details

Journal
Asia-Pacific Journal of Accounting & Economics
Published
2026-07-17
DOI
https://doi.org/10.1080/16081625.2026.2702363
Primary Topic
Corporate Social Responsibility Reporting
Type
article
Field-Weighted Citation Impact
0.00

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article

How do institutional investors evaluate ESG? Evidence from survey and archival data in China

Ying Liu, Ningyue Liu, Huijuan Cao, Huiying Zhang
Asia-Pacific Journal of Accounting & Economics
Corporate Social Responsibility Reporting
article

How do institutional investors evaluate ESG? Evidence from survey and archival data in China

Ying Liu, Ningyue Liu, Huijuan Cao, Huiying Zhang
article en

Abstract

This study examines how institutional investors evaluate corporate ESG performance in emerging markets, using surveys and archival data. We find that investors are more sensitive to ESG performance below the 60th percentile of peers, with limited sensitivity to improvements beyond this point. Both risk and stock return are more affected by ESG performance within this lower range, especially among short-term investors. The results suggest that value-driven considerations, rather than ethical motives, guide institutional investors’ attitudes toward ESG, highlighting the importance of managing ESG expectations and balancing improvements under resource constraints.

Asia-Pacific Journal of Accounting & Economics
Beijing Institute of Technology (CN)
National Natural Science Foundation of China, China Postdoctoral Science Foundation, National Social Science Fund of China, Humanities and Social Science Fund of Ministry of Education of China
Openalex Percentile: Top 6%
Corporate Social Responsibility Reporting
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