ESG Performance and Long-Term Value in Energy Enterprises: an ESG-Centric Economic Analysis AND Forecasting

Jin Chen, Guoyu Huang, Wei Zhou () and Yang Dong ()
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Jin Chen: Faculty of Management and Economics, Kunming University of Science and Technology, Kunming 650500, P.R. China
Guoyu Huang: Faculty of Management and Economics, Kunming University of Science and Technology, Kunming 650500, P.R. China
Wei Zhou: Corresponding Author, Faculty of Management and Economics, Kunming University of Science and Technology, Kunming 650500, P.R. China.
Yang Dong: Zenglin WU, Woosong University, Daejeon Metropolitan City, 34406, South Korea.

Journal for Economic Forecasting, 2025, issue 3, 68-88

Abstract: Against the backdrop of China’s dual carbon goals and the energy sector’s critical role in economic sustainability, this study explores the relationship between ESG performance and long-term value creation in energy enterprises. Leveraging the machine learning method, namely the random forest model, we test the predictive effects of representative financial indicators on ESG performance. Empirical results reveal a significant positive link between ESG performance and energy enterprises’ long-term value. Notably, among ESG dimensions, governance (G) acts as the most influential driver, differing from prior literature emphasizing environmental (E) factors. This divergence stems from state-owned enterprises’ governance advantages, facilitating effective risk management and strategic alignment. Financial indicators, especially total enterprise assets, current ratio, and earnings per share growth rate, highlight the necessity of financial health in supporting sustainable practices. Heterogeneity analysis further shows that energy enterprises with lower media attention and innovation capability gain more from ESG initiatives in enhancing long-term value. This study challenges the conventional focus on environmental factors in state-dominated sectors. By proposing governance-oriented policies and enterprise strategies, this study establishes governance as a critical lever. We offer a novel forecast pathway for sustainable growth under China’s dual carbon agenda. Additionally, the research findings hold implications for emerging economies aiming to integrate ESG criteria into long-term economic stability frameworks.

Keywords: ESG; Long-Term Value; Energy Enterprise; Financial Status; Forecast (search for similar items in EconPapers)
JEL-codes: G30 G32 L11 M14 Q56 (search for similar items in EconPapers)
Date: 2025
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