Research on the Transformation Strategies of Energy Enterprises under the ESG Concept

Abstract

This work investigates the impact of Environmental, Social, and Governance (ESG) strategies on the performance of energy companies, particularly in the context of China's "dual carbon" goals and the global shift towards sustainable development. By employing a case study approach, the paper analyzes three Chinese energy companies with varying ESG ratings. Through a comparative analysis of their ESG practices and financial performance, the study identifies three key pathways through which ESG strategies influence corporate performance: the Innovation Compensation Effect, the Policy Multiplier Effect, and the Risk Penalty Effect. The research demonstrates a positive correlation between ESG ratings and financial performance, suggesting that companies with strong ESG practices tend to achieve higher ROA, revenue growth, and gross profit margins. Furthermore, the paper explores the mediating role of corporate reputation in this relationship. The analysis reveals that ESG initiatives contribute to building a positive reputation, which in turn attracts investors, lowers financing costs, and enhances overall performance. The case studies illustrate the diverse approaches taken by the companies to integrate ESG principles into their operations, highlighting the importance of a comprehensive and strategic approach to ESG implementation. This research underscores the significance of ESG integration as a crucial driver for the transformation and sustainable development of energy companies. The findings offer valuable insights for policymakers, investors, and industry stakeholders seeking to navigate the energy transition and promote responsible business practices. Further research is encouraged to explore the role of technological innovation and policy mechanisms in fostering ESG adoption and enhancing corporate performance in the energy sector.