Does managerial climate risk perception improve environmental, social and governance (ESG) performance? Evidence from China

Ye Tian and Mengyang Zhao

International Review of Financial Analysis, 2025, vol. 102, issue C

Abstract: This study examines the relationship between climate risk perception (CRP) and environmental, social, and governance (ESG) performance and finds a significant positive correlation between them, particularly in the environmental and social aspects. These results remain robust after addressing endogeneity issues and in a series of robustness checks. We also explore how technology transformation, internal governance, and external monitoring moderate the given relationship, revealing significant differences in the impact of CRP on ESG performance with disclosure quality and ownership structure. The results highlight the importance of integrating climate risk considerations into core business strategies for sustainable development and long-term economic resilience and will be useful to policymakers, investors, and corporate managers.

Keywords: ESG performance; Climate risk; MD&a; Textual analysis; Disclosure (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:102:y:2025:i:c:s1057521925000870

DOI: 10.1016/j.irfa.2025.104000

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