Do Green Bonds Enhance Corporate ESG Performance? Micro Data Analysis Based on Chinese Listed Companies

Abstract

This study researches the benefits of green bonds of Chinese listed enterprises in China and their ESG performance under the carbon peak and neutrality targets proposed in China, focusing on bond issuance scale, use of raised funds, bond maturity, post-issuance corporate profit, carbon dioxide emission reduction, and energy savings. Using panel data to investigate the economic drivers of the benefits of green bonds in Chinese listed enterprises through a panel data with a heterogeneity test. Our results reveal a positive relationship between green bonds and the ESG performance of the enterprises. That means the issuance of green bonds is beneficial to the ESG rating. At the same time, due to the differing nature of enterprises, the issuance of green bonds has different impacts on the enhancement of their ESG scores. Firms with weaker financing constraints experience greater benefits from issuing green bonds in terms of enhanced ESG scores, while enterprises with higher initial ESG scores tend to achieve even higher scores after issuing green bonds. The driving factors of the ESG performance benefits for Chinese listed enterprises are mainly the information disclosure, environmental benefits, and social responsibility. Research results may help Chinese listed enterprises to improve the benefits of green bonds and contribute effectively to the green transformations of enterprises.