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Based on 208 city-level data in China, this paper empirically analyzes the impact of ESG rating on carbon emissions through the SDM spatial metrology model, identifies the direct and indirect consequences and spatial spillover effects of ESG rating on carbon emissions, and compares the regional heterogeneity and city-size heterogeneity of such impacts. This paper draws three conclusions: (1) Empirical evidence shows that the ESG rating performance of enterprises has a significant inhibition effect on carbon dioxide emissions. Specifically, when the ESG rating performance increases by 1%, carbon emissions will decrease by 0.076; among other control variables, the effect of FDI on carbon emission reduction is that when ESG score performance increases by 1%, carbon emission decreases by 0.022. (2) In the decomposition of the total effects, indirect effects and direct effects have the same impact on carbon emissions, and the total effect is −0.393. (3) The inhibition effect is more significant in the Eastern Region and in megacities, where the effect of −0.096 in the Eastern Region is more obvious than that of −0.078 at the national level, and the effect of carbon reduction in megacities is significantly greater than 0.013 in big cities. This suggests regional heterogeneity in regards to the role of ESG ratings in reducing CO2 emissions. This paper reveals the specific effects and internal logic of the impact of ESG performance on CO2 emissions, which has certain implications for various regions to further promote the construction of an ESG system, according to local conditions, and to encourage enterprises to focus on emission reduction and high-quality development.
Yang et al. (Thu,) studied this question.