About the Journal
In Memory of Professor Jerzy Radecki
Ownership and Management Statement
Editorial Office
Editorial Board
Scope
Impact Factor
Indexed by
Journal Impact Factor contributing items
Publication Frequency
Revenue Sources & Business Model
Contact
Subscription
Current issue
Online first
Instructions for Authors
Copyright & Licensing
Publication Fees
Editorial policies
Publication Policy Overview
Peer Review Policy
Research Ethics and Malpractice Policy
Plagiarism Policy
Conflict of Interest Policy
Open Access Policy
Instructions for Reviewers
Generative AI and AI-Assisted Technologies Policy
Advertising Policy
Direct Marketing & Manuscript Solicitation
Digital Archiving and Preservation Policy
CrossMark, Correction, and Retraction Policy
Archive
Publication Fees
Copyright & Licensing
Editorial policies
Publication Policy Overview
Peer Review Policy
Research Ethics and Malpractice Policy
Plagiarism Policy
Conflict of Interest Policy
Open Access Policy
Instructions for Reviewers
Generative AI and AI-Assisted Technologies Policy
Advertising Policy
Direct Marketing & Manuscript Solicitation
Digital Archiving and Preservation Policy
CrossMark, Correction, and Retraction Policy
eISSN: 2083-5906
ISSN: 1230-1485
ISSN: 1230-1485
ORIGINAL RESEARCH
Environmental Social and Governance
Performance, Total Factor Productivity
and Environmental Uncertainty in Heavily
Polluting Companies
1
Business School, Hohai University, Nanjing 211100, China
Submission date: 2024-09-21
Final revision date: 2025-05-19
Acceptance date: 2025-05-24
Online publication date: 2025-07-12
KEYWORDS
ESG performancetotal factor productivityheavily polluting companiesenvironmental uncertaintymoderated mediation effect model
TOPICS
ABSTRACT
In recent years, countries around the world have introduced policies to promote the widespread
adoption of Environmental, Social, and Governance (ESG) principles. However, as key players in
the green transition, heavily polluting companies face significant challenges in effectively balancing
economic growth with environmental protection while implementing ESG strategies. The current highly
unstable external environment exacerbates the difficulties these companies encounter in executing their
ESG initiatives. Additionally, there is a lack of literature exploring the impact of ESG performance on
total factor productivity for heavily polluting companies under environmental uncertainty. This study
aims to fill this gap by analyzing data from heavily polluting companies listed on China’s A-share market
from 2011 to 2022. Using a panel data regression approach, the study examines the impact of ESG
performance on total factor productivity and explores the moderating role of environmental uncertainty.
The findings reveal that ESG performance positively influences total factor productivity, with stronger
effects observed in non-state-owned companies, companies located in pillar industries, or companies
with low-competition markets. Mechanism tests suggest that ESG enhances total factor productivity
by reducing financing constraints, improving human capital, and fostering innovation. Moreover,
environmental uncertainty can amplify the positive effect of ESG performance on total factor productivity
by moderating the roles of financing constraints, human capital, and technological innovation. Therefore,
strengthening ESG practices can serve as a strategic approach to mitigating risks, fostering sustainable
growth, and improving financial stability in heavily polluting companies. This study contributes to the
broader literature on ESG and corporate productivity by highlighting the critical role of environmental
uncertainty in shaping ESG’s effectiveness and provides valuable insights for policymakers and corporate
managers seeking to enhance corporate productivity while navigating environmental uncertainty.
CONFLICT OF INTEREST
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
REFERENCES (46)
1.
PARK S.K., SAMPLES T.R. The sovereign climate debt trap and natural disaster clauses. American Business Law Journal. 61 (4), 243, 2024. https://doi.org/10.1111/ablj.1....
2.
LIU H.X., ZHANG Z.H. The impact of managerial myopia on environmental, social and governance (ESG) engagement: Evidence from Chinese firms. Energy Economics. 122, 2023. https://doi.org/10.1016/j.enec....
3.
KIM B., LEE S. The impact of material and immaterial sustainability on firm performance: The moderating role of franchising strategy. Tourism Management. 77, 2020. https://doi.org/10.1016/j.tour....
4.
ZUO Y., JIANG S.Y., WEI J. Can corporate social responsibility mitigate the liability of newness? Evidence from China. Small Business Economics. 59 (2), 573, 2022. https://doi.org/10.1007/s11187....
5.
AMEL-ZADEH A., SERAFEIM G. Why and How Investors Use ESG Information: Evidence from a Global Survey. Financial Analysts Journal. 74 (3), 87, 2018. https://doi.org/10.2469/faj.v7....
6.
SCHALTEGGER S., HÖRISCH J. In Search of the Dominant Rationale in Sustainability Management: Legitimacy- or Profit-Seeking? Journal of Business Ethics. 145 (2), 259, 2017. https://doi.org/10.1007/s10551....
7.
TANG Z., TANG J.T. Can the Media Discipline Chinese Firms' Pollution Behaviors? The Mediating Effects of the Public and Government. Journal of Management. 42 (6), 1700, 2016. https://doi.org/10.1177/014920....
8.
LIU H.X., DU K.R., LI J.L. An improved approach to estimate direct rebound effect by incorporating energy efficiency: A revisit of China's industrial energy demand. Energy Economics. 80, 720, 2019. https://doi.org/10.1016/j.enec....
9.
DENG X., LI W.H., REN X.H. More sustainable, more productive: Evidence from ESG ratings and total factor productivity among listed Chinese firms. Finance Research Letters. 51, 2023. https://doi.org/10.1016/j.frl.....
10.
ZHU D., ZHU C.Z. Research on the impact and mechanism of ESG rating on enterprises' green total factor productivity-based on staggered difference-in-differences model. Environment Development and Sustainability. 2025. https://doi.org/10.1007/s10668....
11.
YU X.C., CHEN Y.H. Does ESG advantage promote total factor productivity (TFP)? Empirical evidence from China's listed enterprises. Applied Economics. 54 (4), 1, 2024. https://doi.org/10.1080/000368....
12.
JIANG L.S., ZHOU W., WU H.L., DENG W. Impact of business environment uncertainty on ESG performance from the perspective of resource supply and demand based on ESG performance. Economic Analysis and Policy. 85, 1012, 2025. https://doi.org/10.1016/j.eap.....
13.
LUO J., WANG Y., ZHU L., JIANG P.P., HE Y.M., HAO T.T. Structural Features of China's Industrial Pollution Inequality: A Spatial-Temporal Distribution Perspective. Frontiers in Environmental Science. 10, 2022. https://doi.org/10.3389/fenvs.....
14.
WANG Z.Y., ZHU N.P., WANG J.N., HU Y.Y., NKANA M. The impact of environmental taxes on economic benefits and technology innovation input of heavily polluting industries in China. Frontiers in Environmental Science. 10, 2022. https://doi.org/10.3389/fenvs.....
15.
DE RAS K., VAN DE VIJVER R., GALVITA V.V., MARIN G.B., VAN GEEM K.M. Carbon capture and utilization in the steel industry: challenges and opportunities for chemical engineering. Current Opinion in Chemical Engineering. 26, 81, 2019. https://doi.org/10.1016/j.coch....
16.
HE F., DU H.Y., YU B. Corporate ESG performance and manager misconduct: Evidence from China. International Review of Financial Analysis. 82, 2022. https://doi.org/10.1016/j.irfa....
17.
XUE Q.Y., JIN Y.F., ZHANG C. ESG rating results and corporate total factor productivity. International Review of Financial Analysis. 95, 2024. https://doi.org/10.1016/j.irfa....
18.
SHAKIL M.H. Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity. Resources Policy. 72, 2021. https://doi.org/10.1016/j.reso....
19.
GHANBARPOUR T., GUSTAFSSON A. How do corporate social responsibility (CSR) and innovativeness increase financial gains? A customer perspective analysis. Journal of Business Research. 140, 471, 2022. https://doi.org/10.1016/j.jbus....
20.
WANG Y.H., YE G., ZHANG Y.X., MU P., WANG H.X. Is the Chinese construction industry moving towards a knowledge- and technology-intensive industry? Journal of Cleaner Production. 259, 2020. https://doi.org/10.1016/j.jcle....
21.
PEDERSEN L.H., FITZGIBBONS S., POMORSKI L. Responsible investing: The ESG-efficient frontier. Journal of Financial Economics. 142 (2), 572, 2021. https://doi.org/10.1016/j.jfin....
22.
GUO X.J., LI S., SONG X.P., TANG Z. ESG, financial constraint and financing activities: A study in the Chinese market. Accounting and Finance. 64 (2), 1637, 2024. https://doi.org/10.1111/acfi.1....
23.
TAN Y.F., ZHU Z.H. The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness. Technology in Society. 68, 2022. https://doi.org/10.1016/j.tech....
24.
ZHANG D.Y., LUCEY B.M. Sustainable behaviors and firm performance: The role of financial constraints' alleviation. Economic Analysis and Policy. 74, 220, 2022. https://doi.org/10.1016/j.eap.....
25.
XIAO W.G., DENG Q., YUAN W., WU N.Q. Financial frictions, capital misallocation, and total factor productivity: evidence from China. Applied Economics. 55 (41), 4853, 2023. https://doi.org/10.1080/000368....
26.
DEMARZO P.M. Presidential Address: Collateral and Commitment. Journal of Finance. 74 (4), 1587, 2019. https://doi.org/10.1111/jofi.1....
27.
MENG T.T., LU D., YU D.N., YAHYA M.H., ZARIYAWATI M.A. Is executive compensation aligned with the company's ESG objectives? Evidence from Chinese listed companies based on the PSM-DID approach. Humanities & Social Sciences Communications. 11 (1), 2024. https://doi.org/10.1057/s41599....
28.
CHEN J. Corporate ESG and total factor productivity: Will the fulfillment of social responsibility sacrifice productivity? Plos One. 19 (4), 2024. https://doi.org/10.1371/journa....
29.
ZHANG X.Y., LI W.J., JI T.H., XIE H.M. The impact of ESG performance on firms' technological innovation: evidence from China. Frontiers in Environmental Science. 12, 2024. https://doi.org/10.3389/fenvs.....
30.
GAO Q.Z., ZHANG J.Q., CHEN G. Firm heterogeneity, biased technological change, and total factor productivity: Evidence from China. Journal of Productivity Analysis. 60 (2), 1, 2023. https://doi.org/10.1007/s11123....
31.
VURAL-YAVAS Ç. Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition. Corporate Social Responsibility and Environmental Management. 28 (1), 82, 2021. https://doi.org/10.1002/csr.20....
32.
LIANG Y.F., CAI C.Y., HUANG Y.C. The Effect of Corporate Social Responsibility on Productivity: Firm-Level Evidence from Chinese Listed Companies. Emerging Markets Finance and Trade. 58 (12), 3589, 2022. https://doi.org/10.1080/154049....
33.
JIN Y., MA Y.Y., YUAN L.B. How does digital finance affect the total factor productivity of listed manufacturing companies? Structural Change and Economic Dynamics. 71, 84, 2024. https://doi.org/10.1016/j.stru....
34.
LI Z.T., CHAI Z.X., REN L.H. Spatial spillover effects of urban innovation on productivity growth: A case study of 108 cities in the Yangtze River Economic Belt. Plos One. 18 (12), 2023. https://doi.org/10.1371/journa....
35.
LV K.J., ZHU S.W., LIANG R., ZHAO Y. Environmental regulation, breakthrough technological innovation and total factor productivity of firms-- evidence from emission charges of China. Applied Economics. 56 (11), 1235, 2024. https://doi.org/10.1080/000368....
36.
LIAN Y.H., YANG Z.X., CAO H. Does ESG performance affect trade credit financing? Evidence from China. Research in International Business and Finance. 74, 2025. https://doi.org/10.1016/j.riba....
37.
SONG Y.H., BIAN Z.A., TU W., HE J. How environmental regulation policies affect corporate ESG ratings: Latecomer advantage in China's digital economy. Energy Economics. 144, 2025. https://doi.org/10.1016/j.enec....
38.
ZHOU J., LEI X.D., YU J.L. ESG rating divergence and corporate green innovation. Business Strategy and the Environment. 33 (4), 2911, 2024. https://doi.org/10.1002/bse.36....
39.
GHOSH D., OLSEN L. Environmental uncertainty and managers' use of discretionary accruals. Accounting Organizations and Society. 34 (2), 188, 2009. https://doi.org/10.1016/j.aos.....
40.
SYVERSON C. What Determines Productivity? Journal of Economic Literature. 49 (2), 326, 2011. https://doi.org/10.1257/jel.49....
41.
CUI X., WANG P.P., SENSOY A., NGUYEN D.K., PAN Y.Y. Green Credit Policy and Corporate Productivity: Evidence from a Quasi-natural Experiment in China. Technological Forecasting and Social Change. 177, 2022. https://doi.org/10.1016/j.tech....
42.
KONG D.M., SHU Y.J., WANG Y.N. Corruption and corporate social responsibility: Evidence from a quasinatural experiment in China. Journal of Asian Economics. 75, 2021. https://doi.org/10.1016/j.asie....
43.
BREUER W., MÜLLER T., ROSENBACH D., SALZMANN A. Corporate social responsibility, investor protection, and cost of equity: A cross-country comparison. Journal of Banking & Finance. 96, 34, 2018. https://doi.org/10.1016/j.jban....
44.
ARELLANO C., BAI Y., KEHOE P.J. Financial Frictions and Fluctuations in Volatility. Journal of Political Economy. 127 (5), 2049, 2019. https://doi.org/10.1086/701792.
45.
KHAN M.A., AHMED M., POPP J., OLÁH J. US Policy Uncertainty and Stock Market Nexus Revisited through Dynamic ARDL Simulation and Threshold Modelling. Mathematics. 8 (11), 2020. https://doi.org/10.3390/math81....
46.
CHEN J.Y., WANG X.C., SHEN W., TAN Y.Y., MATAC L.M., SAMAD S. Environmental Uncertainty, Environmental Regulation and Enterprises' Green Technological Innovation. International Journal of Environmental Research and Public Health. 19 (16), 2022. https://doi.org/10.3390/ijerph....
CITATIONS (1):
1.
How Does Entrepreneur Circle Drive the Willingness of Small and Medium‐Sized Enterprises to Engage in ESG Practices?
Chen Tong, Ling Lin, Zhilong Xu, Jing Li, Yingying Jiang, Wanman Gao
Corporate Social Responsibility and Environmental Management
Chen Tong, Ling Lin, Zhilong Xu, Jing Li, Yingying Jiang, Wanman Gao
Corporate Social Responsibility and Environmental Management
Share
RELATED ARTICLE
| eISSN: | 2083-5906 |
| ISSN: | 1230-1485 |
We process personal data collected when visiting the website. The function of obtaining information about users and their behavior is carried out by voluntarily entered information in forms and saving cookies in end devices. Data, including cookies, are used to provide services, improve the user experience and to analyze the traffic in accordance with the Privacy policy. Data are also collected and processed by Google Analytics tool (more).
You can change cookies settings in your browser. Restricted use of cookies in the browser configuration may affect some functionalities of the website.
You can change cookies settings in your browser. Restricted use of cookies in the browser configuration may affect some functionalities of the website.
