Private enterprises solution for fossil fuels transition: Role of ESG and carbon reporting

Mo Bai, Weixuan Wang and Zhigang Li

Resources Policy, 2024, vol. 99, issue C

Abstract: This paper analyzes the impact of ESG (Environmental, Social, and Governance) investment on China's transition from fossil fuels between 1990 and 2020 using the ARDL approach. The findings indicate that a 1% rise in ESG investment correlates with a 0.18% increase in the fossil fuels transition index in the short term and 0.36% in the long term, facilitating cleaner technologies and lowering CO2 emissions. Additionally, the development of small and medium-sized enterprises (SMEs) enhances the transition index through the adoption of eco-friendly technologies. Conversely, a 1% growth in industrial production or export volume negatively impacts the index, reflecting increased fossil fuel dependency. Furthermore, GDP per capita adversely affects the transition, revealing a higher demand for fossil fuel-dependent goods. Policy suggestions include enhancing ESG reporting and auditing, fostering a strong green finance sector, promoting environmental rankings, and increasing public awareness through media and education.

Keywords: Composite fossil fuels transition index; ESG investment; Private investment; China; ARDL (search for similar items in EconPapers)
JEL-codes: C32 G23 O16 O53 Q43 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:99:y:2024:i:c:s0301420724007748

DOI: 10.1016/j.resourpol.2024.105407

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