The Role of Green Bonds in Improving the Environmental, Social, and Governance (Esg) Performance of Firms

Improving the Environmental, Social, and Governance (ESG) performance of firms is of enormous significance for their sustainable development.This paper examines the impact of issuing green bonds (IGBs) on firm ESG performance.The results show that IGBs improves the ESG performance of firms, which is still valid after the relevant robustness tests.The results of the channel test show that IGBs improve the ESG performance of firms in two aspects: the environment and corporate governance, by improving environmental performance and information disclosure quality.However, IGBs cannot improve the social reputation of firms, and IGBs cannot improve the ESG performance of firms by improving their social reputation.The results of the crosssectional test show that IGBs improves ESG performance more significantly for firms located in regions with a higher level of green finance development, a higher level of financial slack, and a higher level of gender diversity on the board of directors.This study enriches the literature on green bonds and ESG and provides new ideas for improving firm ESG performance.