How Financial Performance Shapes Corporate ESG Performance under China's "Dual Carbon" Agenda: Mechanisms and Heterogeneity

Xinran Gao

doi:10.54691/ed18g177

How Financial Performance Shapes Corporate ESG Performance under China's "Dual Carbon" Agenda: Mechanisms and Heterogeneity

Xinran Gao

Scientific Journal of Economics and Management Research, (2026), Vol.8, No.5, pp.184-195

Published: June 29, 2026

DOI: 10.54691/ed18g177

PDF: Download Full Text PDF

Abstract

China's "dual carbon" agenda has pushed listed companies to treat ESG performance not only as a disclosure item, but also as a measurable dimension of sustainable competitiveness. Against this background, this study examines whether stronger financial performance gives firms the capacity and incentive to improve ESG outcomes. Using A-share listed companies in Shanghai and Shenzhen from 2011 to 2022, the paper applies panel regressions with firm fixed effects and conducts additional model checks. The evidence indicates that Return on Assets is positively associated with corporate ESG ratings in the baseline model, and the conclusion remains supported when alternative ESG and control-variable measures are used. The analysis also shows two boundary conditions: the positive association is weaker for firms with longer listing age, and it is more visible among eastern-region firms and large-scale enterprises. The study contributes to the discussion on how financial resources are converted into ESG practices under low-carbon transition pressure, and it offers implications for resource allocation, differentiated ESG governance, and market-oriented policy incentives.

Keywords: Dual Carbon Goals; Financial Performance; ESG Performance; Listed Companies; High-quality Development.

APA Citation: Xinran Gao (2026). How Financial Performance Shapes Corporate ESG Performance under China's "Dual Carbon" Agenda: Mechanisms and Heterogeneity. Scientific Journal of Economics and Management Research, 8(5), 184-195. https://doi.org/10.54691/ed18g177

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