Business

Real green or fake green? Impact of green credit policy on corporate ESG performance

Y. Liao and X. Zhou

This study, conducted by Yangjie Liao and Xiaokun Zhou, reveals the unintended consequences of China's 2012 Green Credit Guidelines, which impair the ESG performance of polluting enterprises. The research highlights a significant 'crowding out effect' that negatively influences green innovation, especially among non-state-owned enterprises, and offers strategies for transforming these challenges into opportunities.

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Abstract

This study investigates the impact of China's 2012 Green Credit Guidelines on the Environmental, Social, and Governance (ESG) performance of polluting enterprises listed on the Chinese A-share market from 2009 to 2019. Using a difference-in-differences model, the study finds that the policy significantly hinders ESG performance due to a "crowding out effect," reducing green innovation and impacting ESG improvements, particularly for non-state-owned enterprises. The study proposes strategies to transform the dual effects (restriction of financing and crowding out of resources) into dual benefits.

Publisher

Humanities & Social Sciences Communications

Published On

Aug 28, 2024

Authors

Yangjie Liao, Xiaokun Zhou

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