How firms’ perception of energy uncertainty affects ESG performance: evidence from Chinese energy-intensive industry

Hongyu Zhu, Lisha Zhang, Xize Liu and Xiangwei Xie

Applied Economics, 2026, vol. 58, issue 33, 6787-6803

Abstract: This paper examines the effect of firms’ perception of energy uncertainty (PEU) on their environmental, social, and governance (ESG) performance, employing a novel firm-level PEU index. Based on a panel of Chinese energy-intensive firms from 2015 to 2023, we find that elevated PEU significantly undermines ESG performance, particularly in environmental and social dimensions. Further analysis shows that financial constraints amplify the negative impact of PEU on ESG performance, whereas media coverage mitigates this negative relationship. The heterogeneity analysis further demonstrates that the negative influence of PEU on ESG performance is especially pronounced among traditional energy firms. These findings provide valuable insights for policymakers and corporate managers, highlighting the importance of financial support and media engagement in mitigating the risks posed by energy uncertainty.

Date: 2026
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DOI: 10.1080/00036846.2025.2526179

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