The Impact of Environmental Protection Tax on Green Behaviors and ESG Performance of Industrial Enterprises

Xuejia Zheng and Lei Zhuang ()
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Xuejia Zheng: School of Economics and Management, Nanjing Tech University, Nanjing 211816, China
Lei Zhuang: School of Economics and Management, Nanjing Tech University, Nanjing 211816, China

Sustainability, 2025, vol. 17, issue 19, 1-18

Abstract: Environmental protection tax is levied based on various types of emitted pollutants and has a significant impact on the green behaviors and ESG (environmental, social, and corporate governance) performance of enterprises. This article explores the green effect and the impact of environmental protection tax on the green behavior of listed companies with in-depth empirical analysis based on the data of industrial enterprises listed on the A-shares from 2018 to 2022 in China. Research has found that the implementation of environmental protection tax has played a significant driving role in improving the overall performance level of corporate ESG, and this tax system has formed a driving force mechanism for enterprises to increase investment in green innovation and effectively improve their comprehensive ESG performance. Green innovation plays a significant intermediary role between environmental protection tax and corporate ESG performance. It is suggested that regions should adjust the applicable amount of environmental protection tax, increase green innovation, and standardize pollution control and emission reduction regulations.

Keywords: environmental tax system; environmental protection tax; enterprise green behaviors; ESG performance; pollution control and emission reduction (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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