Judicial Transparency and Corporate ESG Performance

This study explores the impact of judicial transparency on the Environmental, Social, and Governance (ESG) performance of local listed firms, using the disclosure of court environmental judgments mandated by China's 2013 judicial transparency reform as a proxy. Analyzing a large panel dataset, we find a significant positive relation between the disclosure of environmental judgments at the city level and the ESG performance of firms within those jurisdictions. These findings highlight how judicial transparency can drive improvements in ESG performance within China's unique institutional context, and they contribute to a more comprehensive understanding of the factors influencing firms' ESG outcomes in emerging economies with similar governance structures. We also find that the impact of disclosing environmental judgments differs based on firm, industry, and regional characteristics.