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<p>Sustainable development of energy companies in recent years has become a common goal globally. Thus, the correlation between its environmental, social, and governance (ESG) scores and financial performance (FP) has also attracted widespread attention from stakeholders. However, previous researches have not conducted a macro-analysis of the whole energy industry classification. This research takes China’s listed energy companies from 2018 to 2024 as the sample companies and conducts panel data regression analysis and a robustness test. Our sample encompasses firms engaged in the production of fossil fuels (e.g., coal, oil, natural gas) and utilities (e.g., electricity, heat, gas), using inputs ranging from conventional sources like coal and nuclear to renewables such as wind and water. To fill the gap in ESG literature on China’s energy industry, this paper presents heterogeneity analysis according to company ownership and energy type respectively. The results reveal a significant negative correlation between aggregate ESG scores and FP (− 0.004, p &lt; 0.05), with the social (S) dimension exhibiting the strongest negative influence (− 0.003, p &lt; 0.01). Moreover, non-state-owned enterprises and new energy enterprises show a more pronounced negative ESG–FP relationship. This study provides recommendations for the sustainable development of the entire energy industry in China, and can also promote the improvement and development of ESG systems in emerging countries.</p>

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ESG Scores and financial performance are making energy companies be in a dilemma: evidence from China

  • 期刊论文

  • 发表日期：

    2025年11月10日

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  • Fang-rong Ren,
  • Hui-yi Chen,
  • Xi-ting Yang,
  • Xin-ge Guan,
  • Xiao-yan Liu

摘要

Sustainable development of energy companies in recent years has become a common goal globally. Thus, the correlation between its environmental, social, and governance (ESG) scores and financial performance (FP) has also attracted widespread attention from stakeholders. However, previous researches have not conducted a macro-analysis of the whole energy industry classification. This research takes China’s listed energy companies from 2018 to 2024 as the sample companies and conducts panel data regression analysis and a robustness test. Our sample encompasses firms engaged in the production of fossil fuels (e.g., coal, oil, natural gas) and utilities (e.g., electricity, heat, gas), using inputs ranging from conventional sources like coal and nuclear to renewables such as wind and water. To fill the gap in ESG literature on China’s energy industry, this paper presents heterogeneity analysis according to company ownership and energy type respectively. The results reveal a significant negative correlation between aggregate ESG scores and FP (− 0.004, p < 0.05), with the social (S) dimension exhibiting the strongest negative influence (− 0.003, p < 0.01). Moreover, non-state-owned enterprises and new energy enterprises show a more pronounced negative ESG–FP relationship. This study provides recommendations for the sustainable development of the entire energy industry in China, and can also promote the improvement and development of ESG systems in emerging countries.