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On the fast track: the benefits of ESG performance on the commercial credit financing

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Abstract

Under the sustainability strategy, a company’s ability to enhance its financing capacity through improvements in environmental, social, and governance (ESG) performance is crucial for fostering high-quality development. This study empirically examines the impact of corporate ESG performance on commercial credit financing (CCF) using data from China’s A-share listed companies between 2009 and 2021. The findings of the panel regression analysis revealed a significant positive correlation between a company’s ESG performance and CCF. Further analysis of the influencing mechanisms indicates that a company’s ESG performance can increase its likelihood of obtaining CCF by reducing environmental, social, and governance risks. Specifically, we found that ESG performance facilitates access to CCF by promoting green innovation, enhancing social reputation, and mitigating operational risk. This study expands and enriches the theory of informal financing of enterprises while incorporating the more comprehensive assessment criteria for sustainable development.

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Data availability

Data will be made available on request.

Notes

  1. The action initiative proposed at COP26 is called the “Glasgow Climate Pact.”.

    The URL is https://www.un.org/es/climatechange/cop26

  2. This value is calculated based on the mean of the descriptive statistics of CCF listed in Table 2: 15.6% = 0.156 * 100%.

  3. From 2013 to 2014, the pilot areas during the period were Beijing, Tianjin, Shanghai, Chongqing, Hubei Province, and Guangdong Province.

  4. URL: https://www.hexun.com.

  5. These industry codes are B06, B07, B08, B09, B10, B11, C15, C17, C18, C19, C22, C25, C26, C27, C28, C29, C30, C31, C32, and D44.

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Funding

We acknowledge the support and funding from National Social Science Fund of China (Grant No. 20BGL087).

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Authors and Affiliations

  1. School of Management, Shandong University of Technology, Zibo, 255000, China

    Yujie Huang, Fuping Bai, Mengting Shang & Mahmood Ahmad

Authors
  1. Yujie Huang
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  2. Fuping Bai
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  3. Mengting Shang
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  4. Mahmood Ahmad
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Contributions

Yujie Huang: conceptualization, investigation, resources, visualization, roles/writing—original draft, and writing—review and editing. Fuping Bai: conceptualization, supervision, funding acquisition, project administration, roles/writing—original draft, and writing—review and editing. Mengting Shang: formal analysis, data curation, methodology, resources, software, validation, and writing—review and editing. Mahmood Ahmad: resources, supervision, and writing—review and editing.

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Correspondence to Fuping Bai.

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Huang, Y., Bai, F., Shang, M. et al. On the fast track: the benefits of ESG performance on the commercial credit financing. Environ Sci Pollut Res 30, 83961–83974 (2023). https://doi.org/10.1007/s11356-023-28172-x

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