Despite the growing institutionalization of ESG and the constraints imposed by high transparency, firms continue to exhibit substantial heterogeneity in sustainable governance. Through the lens of managers’ early-life experiences, this paper uses a sample of Chinese A-share listed firms to examine the effect of CEOs’ exposure to the Great Chinese Famine on corporate environmental, social, and governance (ESG) performance. We find that firms led by famine-exposed CEOs have significantly lower ESG scores, with an average decline of 2.91%. Further analyses show that this negative effect is stronger when CEOs have longer career horizons and when the executive team is more homogeneous in famine exposure, but weaker when industry peers exhibit higher ESG performance, suggesting that benchmarking and normative pressure can partially discipline governance deviations rooted in managerial heterogeneity.
Junjie Lin (Sun,) studied this question.