The Impact of Climate Policy Uncertainty on the ESG Performance of Enterprises

In the context of addressing climate change, the uncertainty of climate policies has intensified the environmental and regulatory risks faced by enterprises, forcing them to adjust their strategies for fulfilling ESG responsibilities in pursuit of sustainable development. This paper uses panel data from listed non-financial enterprises on China's Shanghai and Shenzhen A-share markets from 2011 to 2022, employing a fixed-effects panel model to examine the impact of climate policy uncertainty on corporate ESG performance. The findings indicate that climate policy uncertainty significantly hampers the ESG performance of enterprises. The mechanism analysis reveals that climate policy uncertainty negatively affects ESG performance by deepening corporate financing constraints and increasing short-term financial performance. The heterogeneity analysis shows that in terms of ownership structure, the negative impact of climate policy uncertainty on the ESG performance of state-owned enterprises is relatively weaker. In terms of industry heterogeneity, climate policy uncertainty suppresses the ESG performance of enterprises in technology-intensive industries. From a regional perspective, climate policy uncertainty has a stronger inhibitory effect on the ESG performance of enterprises in eastern China. This study provides valuable insights for both national climate policy formulation and corporate efforts to enhance ESG performance.