ESG, Climate Risk, and Debt Management—Evidence from Chinese Listed Companies

Yang Zhao (), Kamarul Bahrain bin Abdul Manaf and Hazeline bt Ayoup
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Yang Zhao: College of Business, Universiti Utara Malaysia, Sintok 06010, Malaysia
Kamarul Bahrain bin Abdul Manaf: College of Business, Universiti Utara Malaysia, Sintok 06010, Malaysia
Hazeline bt Ayoup: College of Business, Universiti Utara Malaysia, Sintok 06010, Malaysia

IJFS, 2025, vol. 13, issue 3, 1-34

Abstract: The United Nations Sustainable Development Goals emphasize the need to assist developing countries in achieving long-term debt sustainability. Global corporate debt has repeatedly reached record levels, and the associated financial costs pose a significant threat to sustainable development. This study uses panel data from Chinese listed companies for regression analysis. The findings show that ESG reduces the interest-bearing debt ratio, the equity pledge of controlling shareholders, and the deviation from the target debt ratio, all of which contribute to improved debt management. Climate risk further strengthens the impact of ESG on debt management. Additionally, green credit policies help reduce the interest-bearing debt ratio in high-pollution industries through ESG practices.

Keywords: ESG; debt management; climate risk (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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