Research on the Impact of Corporate ESG on Promoting Common Prosperity—Empirical Evidence from Chinese A-share Listed Companies 2011-2023

Using data on Chinese A-share listed companies from 2011 to 2023, this paper examines the relationship between ESG and common prosperity at the firm level. From a theoretical perspective, corporate ESG activities can promote common prosperity through two channels: first, by improving corporate financial performance, that is, by "making the cake bigger"; and second, by optimizing the internal income distribution of enterprises, that is, by "dividing the cake well." The empirical analysis, based on a two-way fixed-effects model, yields the following results. ESG practices significantly enhance corporate financial performance, exerting significantly positive effects on return on equity, return on total assets, and operating profit, and the environmental dimension (E) has the strongest promoting effect on corporate growth. However, corporate ESG practices have not significantly optimized internal income distribution: they fail to increase the labor income share and, to some extent, even widen the pay gap between management and ordinary employees. These findings indicate that current ESG practices in Chinese enterprises play a positive role mainly in "making the cake bigger" but have not achieved the expected results in "dividing the cake well." To enable enterprises to better leverage ESG practices in contributing to common prosperity, policymakers should accelerate the improvement of ESG disclosure requirements and unified standards, strengthen ESG publicity and education, and promote the organic integration of the traditional concept of balancing righteousness and profit with ESG and common prosperity, so as to better respond to the theoretical and practical needs in related fields.