How does peer firms' ESG performance affect carbon emission reductions ?

Pei Wang, Weixian Xue and Zhi Li

Finance Research Letters, 2025, vol. 83, issue C

Abstract: This study analyzes the green spillover effects of peer firms' ESG performance on the carbon reduction actions of focal organizations from 2013 to 2023. Empirical data indicates that superior ESG practices among industry peers substantially improve the decarbonization efforts of focal enterprises, principally mediated by diminished financial restrictions and increased public attention. Competitive pressures and the pursuit of legitimacy compel focal firms to implement sustainable practices, especially when peers exhibit genuine ESG commitments. The findings highlight the pivotal influence of peer dynamics and institutional circumstances in expediting business climate shifts.

Keywords: Peer effect; ESG performance; Carbon emission reduction (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009699

DOI: 10.1016/j.frl.2025.107711

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