Mitigating the Impact of Energy Uncertainty on Stock Prices: Environmental, Social, and Governance Insights from Chinese Firms

Whelsy Boungou () and Melchisedek Joslem Ngambou Djatche ()
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Whelsy Boungou: PSB - Paris School of Business - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université
Melchisedek Joslem Ngambou Djatche: CONFLUENCES - SFR UA 4201 Confluences - UA - Université d'Angers, GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement

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Abstract: This study examines the effect of energy uncertainty on the stock performance of 2,076 Chinese enterprises from 2017 to 2023. The results indicate that a 1% rise in energy uncertainty reduces stock prices by approximately 29.7%, while oil price uncertainty decreases them by 9.9%. Firms with higher Environmental, Social, and Governance (ESG) scores show greater resilience to energy shocks, suggesting that strong ESG performance mitigates adverse effects. The findings highlight the importance of incorporating ESG strategies to strengthen market stability under energy volatility. By integrating energy uncertainty and ESG performance, this study provides new insights into the role of sustainable development practices as a non-traditional hedging mechanism. The findings have important implications for corporate risk management, sustainable investment, and financial policy aimed at strengthening market stability in the context of escalating energy uncertainty.

Keywords: China firms; Energy price uncertainty; ESG; Stock market (search for similar items in EconPapers)
Date: 2026
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Published in Financial Innovation, inPress

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05664588

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