The Impact of Corporate Environmental, Social, and Governance Performance on Total Factor Productivity: An Analysis of the Moderating Effect of Environmental Uncertainty

Yuan Li, Yongchun Huang (), Yupeng Zhao and Zi Ye
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Yuan Li: College of Economics and Finance, Hohai University, Changzhou 213200, China
Yongchun Huang: Business School, Hohai University, Nanjing 211100, China
Yupeng Zhao: College of Economics and Finance, Hohai University, Changzhou 213200, China
Zi Ye: Business School, Jiangsu Open University, Nanjing 210036, China

Sustainability, 2025, vol. 17, issue 19, 1-24

Abstract: Environmental, Social, and Governance (ESG) performance has become a vital instrument for corporations to integrate sustainable development principles into business operations. Against the dual backdrop of disruptions in the international order and economic instability, investigating the impact of corporate ESG performance on total factor productivity (TFP) under environmental uncertainty is of significant importance. Utilizing data from Chinese A-share listed companies spanning the period 2011 to 2022, this study employs a baseline regression model, a mediation effect model, a moderation effect model, and a moderated mediation model to examine the impact of corporate ESG performance on TFP under conditions of environmental uncertainty. The results indicate that (1) corporate ESG performance exerts a positive influence on TFP, particularly in tertiary industry firms, state-owned enterprises (SOEs), and enterprises with lower environmental risks; (2) improving ESG performance helps alleviate financing constraints, enhance human capital, and boost innovation capability, thereby strengthening TFP; and (3) environmental uncertainty moderates the pathway through which ESG performance affects TFP, amplifying its positive effect. Based on these findings, it is recommended that countries collaborate to establish a global, cross-industry platform for sharing ESG practices, develop a stable ESG policy framework and incentive mechanisms, and encourage enterprises to enhance their ESG management and resilient governance capabilities to promote sustainable economic development.

Keywords: ESG performance; TFP; environmental uncertainty; moderated mediation effect (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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