The Impact of ESG Disclosures on Corporate Financial Performance

Yiyun Zhang ()
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Yiyun Zhang: The University of Sydney, Business School

A chapter in Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024), 2025, pp 199-207 from Springer

Abstract: Abstract The policy orientation of ESG development underscores the importance of listed companies standardizing their ESG disclosures. Actively disclosing ESG information can not only enhance internal operational efficiency but also foster business expansion and drive innovation. By making their ESG practices transparent, companies may optimize resource allocation and streamline processes. Externally, improved public trust is largely attributed to an enhanced corporate reputation. This strengthened reputation, in turn, attracts more investors and promotes long-term, stable financial performance by signaling a commitment to sustainable practices. Using financial data from Ping An, this paper further analyzes the influence of ESG disclosure on corporate financial performance. The study’s key findings are as follows: (1) ESG disclosure has a modest positive impact on profitability indicators, although the effect remains limited. (2) ESG-driven sustainability transformations have a minimal impact on Ping An’s solvency indicators, indicating stability in that regard. (3) ESG disclosure significantly enhances the accounts receivable turnover ratio and operating cycle. However, in the short term, total asset turnover is negatively influenced by ESG practices, showing a slight downward trend as companies adapt.

Keywords: ESG Disclosure; Financial Performance; Ping An (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-652-9_21

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DOI: 10.2991/978-94-6463-652-9_21

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