The Effect of Governance Dimension of ESG on Corporate Performance

Since the Chinese government put forward the “dual carbon target”, China’s ESG has entered a stage of rapid development, and people from all walks of life pay increased attention to the ESG governance concept of listed companies. Most of the current research on ESG and economic consequences focuses on the environmental (E) and social (E) dimensions, with a need for more research on the governance (G) dimension. Using the governance dimension score and Tobin’s Q as measurement indicators, this paper proves that the governance dimension of ESG significantly promotes corporate performance by studying the operational mechanism between the governance dimension and corporate performance. The research conclusions enrich the research literature on the factors influencing the economic consequences of ESG, and provide practical implications for various stakeholders.