Enhancing the corporate social & environmental responsibility of Chinese energy enterprises: A view from the role of management compensation incentive

Jiaxin He, Jingyi Li and Xing Chen ()
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Jiaxin He: Yibin University
Jingyi Li: Chinese Academy of Sciences
Xing Chen: Dalian University of Technology

Palgrave Communications, 2024, vol. 11, issue 1, 1-13

Abstract: Abstract Energy enterprises are an important basis for ensuring national energy security and economic development, and their social responsibility is closely related to addressing environmental concerns such as over-exploitation of resources and excessive discharge of pollution. The casual effects of management compensation incentives on corporate social & environmental responsibility are explored based on the panel data of Chinese energy enterprises from 2010 to 2021 using the instrumental variable estimation method. The results indicate that management salary incentives can significantly promote the implementation of corporate social responsibility and environmental responsibility, while the proportion of management shareholding will reduce corporate social responsibility (CSR) and environmental responsibility (CER) activities. In addition, there are obvious industry differences and corporate ownership differences in the effects of management compensation incentives on CSR and CER. The negative impact of equity incentives on CSR and CER is even more pronounced in the electricity and environmental industry, and salary incentives have a greater positive effect on CSR for state-owned enterprises. The study shows that enterprises should focus on the salary incentive of managers and appropriately reduce their shareholding. The government should pay attention to the development of state-owned energy enterprises, and limit the shareholding ratio of management through policies and other incentive systems.

Date: 2024
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DOI: 10.1057/s41599-024-02687-1

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