Corporate ESG and total factor productivity: Will the fulfillment of social responsibility sacrifice productivity?

• Published in: PloS one Vol. 19; no. 4; p. e0301701
• Main Author: Chen, Jian
• Format: Journal Article
• Language: English
• Published: United States Public Library of Science 25.04.2024; Public Library of Science (PLoS)
• Subjects: Analysis; China; Conservation of Natural Resources - economics; Ecology and Environmental Sciences; Economic Development; Efficiency; Engineering and Technology; Government business enterprises; Humans; Innovations; Management; Methods; Physical Sciences; Research and Analysis Methods; Social aspects; Social Responsibility; Social Sciences; Sustainable Development - economics; China
• ISSN: 1932-6203; 1932-6203
• DOI: 10.1371/journal.pone.0301701

With the increasing prominence of climate and energy issues, enterprises, as the micro-subjects of economic activities, need to pay attention to environmental responsibility to promote sustainable and high-quality economic development. However, one of the crucial controversies is whether enterprises will sacrifice efficiency to fulfill their environmental responsibilities. To try our best to answer the controversy, this paper explores the impact of ESG on total factor productivity and its mechanism. The research conclusion shows that Chinese enterprises fulfilling ESG responsibilities can improve staff efficiency, reduce financing costs, ease financing constraints, and increase innovation investment, thus effectively improving total factor productivity. Compared to non-state-owned enterprises, this effect is more significant in state-owned enterprises. In addition, the promotion of ESG construction on the total factor productivity of enterprises also presents specific acceleration characteristics. This shows that in the socialist market economy environment, there is an obvious "social responsibility dividend" in the implementation of the ESG concept by Chinese enterprises, which is helpful to enhance their long-term value and realize a win-win of social value and commercial value. The conclusions of this study help deal correctly with the relationship between business value and social value of enterprises and provide inspiration for promoting healthy and sustainable economic development.