A Review of Research on The Impact of ESG Performance on Enterprise Value

Abstract

In the current complex market environment and the frequent occurrence of various sudden business risks, enterprises pay more and more attention to the ability of sustainable development. ESG level has become the core evaluation index to measure the potential of sustainable development of enterprises.This paper collects and organizes existing literature on ESG levels and corporate value, analyzing and summarizing the relationship between ESG performance and corporate value, the heterogeneity of their impacts, the effects of the three ESG dimensions on corporate value, and the transmission mechanisms involved. It is found that most of the existing studies confirm that ESG performance has a positive promotion effect on enterprise value, but there are also different conclusions that the two are negatively correlated or U-shaped. The value enhancement effect is more prominent in non-state-owned enterprises and high-tech enterprises. Consensus has been reached on the positive effect of corporate governance (G) on corporate value, but there are still differences in the relevant conclusions of environment (E) and social responsibility (S); Enterprises with excellent ESG performance can realize the improvement of corporate value by relying on multiple transmission paths such as green innovation, digital transformation, media public opinion, financing cost optimization and investor expectation improvement. Finally, this paper summarizes the shortcomings of the research and the main directions for future research, aiming to provide theoretical basis and practical guidance for enterprises to use ESG to promote the improvement of enterprise value.