The impact of ESG performance on corporate financial performance: an empirical study of China's manufacturing industry from 2019 to 2023

As the global climate change situation continues to intensify and China's "dual carbon" strategy is deeply implemented, ESG performance has become a key indicator for measuring a company's sustainable development capability. Taking Chinese manufacturing enterprises as a sample, this paper studies the impact path and dynamic effects of ESG performance on the financial performance of manufacturing enterprises, thereby revealing and explaining the proactive behaviors of enterprises in practicing ESG. This paper adopts a two-way fixed effects model and empirically tests the impact and mechanism of ESG performance on corporate financial performance using unbalanced panel data from 2019 to 2023. The research shows that improving a company's ESG performance helps to enhance its financial performance. The improvement in ESG performance positively affects corporate financial performance by reducing financing costs, and this effect is more significant in non-heavy polluting and high-tech enterprises.