Impact of ESG Performance on Carbon Emission Intensity – Empirical Evidence from A-share listed companies in Northwest China

Abstract

As the global climate crisis intensifies, decarbonization has become a strategic imperative for sustainable development. China, as the world’s largest carbon emitter, faces increasing pressure to balance economic growth with environmental responsibility. In response, the nation has pledged to peak carbon emissions by 2030 and achieve carbon neutrality by 2060, presenting significant challenges for the industrial transformation of Northwest China, where the economy remains heavily reliant on high-emission industries. In this context, the Environmental, Social, and Governance (ESG) framework—recognized for its critical role in facilitating sustainable transitions—has gained importance in guiding local enterprises toward emission reduction. This empirical study investigates the relationship between ESG performance and carbon emission intensity, drawing on public data from five provinces in Northwest China. To deepen the analysis of underlying mechanisms, the study also examines the mediating role of green innovation. The findings reveal that strong ESG performance contributes to carbon emission reductions by enhancing firms' green innovation capacities. Based on these results, the study offers actionable insights to support policymakers and industry stakeholders in advancing carbon reduction goals and promoting sustainable industrial development.

Keywords: ESG performance, Carbon emission intensity, Green innovation, Northwest China

DOI: 10.7176/JESD/16-3-04

Publication date: May 30th 2025