ESG Performance Under Economic Policy Uncertainty: An Empirical Study of Chinese Corporations

ESG is an investing philosophy including enterprise environment, society, and governance, and it is crucial for determining whether publicly traded corporations take appropriate social responsibility. Using annual data from 2011 to 2020 from 5,271 companies, this study examines the impact of economic policy uncertainty (EPU) on Chinese companies’ environmental, social, and governance (ESG) practices. Our results show that companies tend to be more conservative in their overall ESG performance, environmental performance, and corporate governance in times of high uncertainty. A robust check has been done to verify the results. This study contributes to the existing knowledge of the effects of economic policy uncertainty and the ESG drivers. This report also gives implications for assisting the government in enhancing the ESG performance of businesses.