Does national ESG performance curb greenhouse gas emissions?

Abstract

Balancing economic growth and carbon emissions is crucial for managing irreversible climate change. We investigate the impact of national ESG performance on greenhouse gas emissions and explores the role of environmental policy stringency on this impact. Based on the panel data of 41 countries from 1990 to 2020, we found that improving national ESG performance effectively suppressed greenhouse gas emissions, and improving environmental performance played a decisive role. Improving social performance may increase greenhouse gas emissions, but governance performance has no significant impact. Environmental policy stringency has strengthened the suppression of greenhouse gas emissions by ESG performance, and this effect is more evident in OECD countries. Heterogeneity analysis shows that environmental policy stringency reverses the stimulus of social performance on emissions, and its joint effect with governance performance reduces greenhouse gas emissions. Our findings provide empirical evidence for understanding the relationship between national ESG performance and greenhouse gas emissions and provide valuable insights for more effective environmental policymaking.

Keywords

• C33
• Q01
• Q54