Research on the Impact of ESG Performance on Corporate Financial Performance: An Empirical Analysis based on Chinese A-share Listed Companies

Against the backdrop of the wider adoption of sustainable development principles, the ongoing refinement of capital-market information disclosure mechanisms, and investors' increasing emphasis on long-term value assessment, Environmental, Social and Governance (ESG) has become a key perspective for assessing firms' non-financial performance and capacity for sustainable value creation. The research zeroes in on Chinese A-share companies, creating a year-round database from 2009 to 2024 using Huazheng ESG's yearly ratings and financial statement data, while empirically exploring the link between corporate ESG achievements and financial results.This research employs the return on assets (ROA) and return on equity (ROE) as indicators of financial performance, utilizes the ESG comprehensive score along with three-dimensional scores for environmental, social, and governance performance as primary explanatory factors, and accounts for elements like the size of the enterprise, the debt-to-asset ratio, and the rate of revenue growth. In terms of the study design, this paper uses multiple regression models, enterprise fixed effects and year fixed effects models, multi-dimensional regression and robustness tests to mitigate the impact of industry differences, time shocks and invisible enterprise characteristics on the estimates. The expected contribution of this paper is: First, it provides additional empirical evidence on the ESG-financial performance nexus in China's A-share market using a relatively long sample period; Second, it compares how the environmental, social and governance dimensions differ in their effects on corporate performance from the perspective of ESG's internal structure; Third, interpret the economic implications of ESG within the framework of risk mitigation, governance improvement, and resource allocation efficiency enhancement. The findings will help companies optimize ESG resource allocation, regulators improve information disclosure systems, and provide a reference for investors to identify the long-term value of companies.