Author(s)

HaiXu Yu¹, ChuanYu Liang^2,*, SuSheng Wang²

Affiliation(s)

¹School of Economics, Shenzhen Polytechnic University, Shenzhen 518055, Guangdong, China.

²College of Business, Southern University of Science and Technology, Shenzhen 518055, Guangdong, China.

Corresponding Author

ChuanYu Liang

ABSTRACT

In recent years, more and more countries worldwide are paying attention to the risks and opportunities associated with sustainable development. This study examines the impact of ESG practices on firm sustainability, risk assessment, and economic value. Unlike traditional financial data, ESG metrics assess corporate sustainability from a non-financial perspective and have become key indicators for evaluating a firm's growth potential. This paper reviews the current state of ESG information disclosure and analyzes the effects of ESG practices on corporate risk, firm value, and capital costs. The findings indicate that higher ESG performance is generally positively correlated with a firm's market valuation and shareholder returns, while also helping to reduce information asymmetry and capital market risks. However, the existing ESG rating system lacks consistency and standardization, leading to significant discrepancies in the ratings provided by different agencies for the same firm.

KEYWORDS

ESG performance; Information disclosure; Corporate risk; Firm value

CITE THIS PAPER

HaiXu Yu, ChuanYu Liang, SuSheng Wang. ESG practices and corporate sustainability: evaluation, risks, and economic consequences. Trends in Social Sciences and Humanities Research. 2024, 2(11): 43-47. DOI: https://doi.org/10.61784/tsshr3112.

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