Research on the Applicability of ESG Ratings in Different Industries and Their Impact on Corporate Performance

Junxian Cao (), Zhenghong Sun (), Juncheng Shi (), Shuting Yang (), Qinze Li () and Yuxuan Wang ()
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Junxian Cao: Lincoln University College, Accounting Program, Faculty of Business and Accounting
Zhenghong Sun: Lincoln University College, Accounting Program, Faculty of Business and Accounting
Juncheng Shi: Lincoln University College, Accounting Program, Faculty of Business and Accounting
Shuting Yang: Lincoln University College, Accounting Program, Faculty of Business and Accounting
Qinze Li: INTI International University, Accounting and Finance
Yuxuan Wang: Siam University, Business Administration Major, School of Business Administration

A chapter in Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025), 2025, pp 348-360 from Springer

Abstract: Abstract Against the backdrop of global economic sustainable development, ESG (Environmental, Social, and Governance) assessment has emerged as a crucial indicator for measuring a company’s non-financial performance and sustainable development capabilities. Through empirical analysis, this study delves deep into the applicability of ESG ratings in various industries and their impact on corporate performance. The research selects representative industries such as food, textiles, construction, oil and gas, and real estate, and collects ESG rating data and performance indicators of relevant companies. Using a multiple linear regression model, it analyzes the impact of the comprehensive ESG score and its dimensions (environmental, social, and governance) on corporate performance, and conducts a differential analysis across different industries. The study finds that there is a significant positive correlation between ESG ratings and corporate performance, and there are obvious differences in the characteristics of ESG ratings and their impact mechanisms on corporate performance among different industries. For example, the food industry places a higher weight on the environmental dimension, while the construction industry attaches more importance to both the environmental and governance dimensions. Overall, a company’s overall performance in the three aspects of environment, society, and governance is closely linked to its performance growth, and the positive correlation between the balanced-weight ESG score and corporate performance is evident. However, due to the differences in weight allocation among different rating agencies, there may be a certain mismatch between the scoring results and the actual performance of the company. This research not only enriches the theoretical studies in the ESG field but also provides guidance for companies’ ESG practices, helping them better understand how to improve their performance and competitiveness by enhancing their ESG performance within the context of specific industries.

Keywords: ESG ratings; Corporate performance; Different industries; Applicability; Impact mechanism (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-770-0_40

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DOI: 10.2991/978-94-6463-770-0_40

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