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September 10, 2025

Do All Food and Beverage Firms Benefit From Voluntary ESG Reporting? Evidence From China's Listed Companies

Key Points

Issuing standalone esg reports is negatively associated with firm performance across multiple measures.
The negative relationship turns positive for firms with esg performance above the industry median.
Utilizing a fixed effects panel model, this study analyzes data from both reporting and non-reporting firms.
Findings suggest that while esg initiatives may appear costly at first, long-term benefits can ensue with effective implementation.

Abstract

ABSTRACT This study investigates the relationship between voluntary Environmental, Social, and Governance (ESG) reporting and firm performance—measured by Return on Assets (ROA), Return on Equity (ROE), and Tobin's Q—in China's food and beverage (F&B) sector. Using a fixed effects panel model on a data set of both reporting and non‐reporting listed firms from 2008 to 2023, we find that, overall, the issuance of standalone ESG reports is negatively associated with firm performance across all three measures. However, the results also reveal that this relationship becomes positive when firms exhibit ESG performance above the industry median. These findings suggest that ESG reporting, in isolation, may represent a costly signal in the short term. Nonetheless, firms that effectively implement ESG initiatives and earn superior scores from third‐party agencies can achieve improved outcomes over time. Implications for the F&B sector are discussed.

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