ESG Investors and Firm Performance: Catering or Impacting

Abstract

As the scale of ESG investment grows, the way it affects firm performance remains unclear. This study explores the relationship between ESG investment and firm performance through empirical analysis, and finds that the relationship is complex, with both catering and impacting, and that it varies across countries, firms and dimensions. While some firms’ ESG performance improves after investment, there are also firms that engage in catering behavior. Based on the findings of the study, the article proposes corresponding recommendations for firms and investors, including the formulation of long-term ESG strategies by firms, integration into their core strategies, focusing on the improvement of social performance; the reinforcement of ESG investment concepts by investors, in-depth analysis of ESG performance of firms, and the formulation of diversified investment strategies.