The Impact of ESG Performance on Business Performance before and after the COVID-19－Taking the Chinese Listed Companies as a Sample

Abstract

Under the influence of the COVID-19 in 2020, almost all industries have been hit unprecedentedly. The overall economy is on a downward trend, making economic development a high degree of uncertainty. Therefore, this paper takes the Chinese A-share listed companies that have been evaluated based on the Environmental, Social and Governance (ESG) performance in the three years from 2019 to 2021 as samples and analyzes the impact of ESG performance on business performance before and after the COVID-19 through the empirical method of the OLS and quantile regression. The findings of this study are summarized as follows: 1) The performance of ESG during the pandemic played a significant role in resisting its impact on revenue and earnings per share (EPS). 2) The performance of ESG during the pandemic has a negative and significant relationship with changes in the company’s free cash flow. However, if the ESG performance is maintained above the level of the previous period and the social responsibility report is actively disclosed by the GRI reporting guidelines, it will have a positive and significant impact on the changes in the company’s free cash flow. 3) The performance of ESG during the pandemic has no obvious effect on the company’s performance recovery after the pandemic, including the increase in revenue and EPS, and the increase in free cash flow. Based on the research findings, this paper also suggests that companies should continuously and progressively implement corporate social responsibility (CSR) and that the state should further improve the requirements for CSR.