Enhancing Corporate ESG Performance Through Policy Pilots — A Quasi-Natural Experiment and Mechanism Analysis Based on New Energy Demonstration Cities

Zhongtao Xu

doi:10.54254/2754-1169/2025.BL29439

Advances in Economics, Management and Political SciencesOpen access

Enhancing Corporate ESG Performance Through Policy Pilots — A Quasi-Natural Experiment and Mechanism Analysis Based on New Energy Demonstration Cities

Research Article

Open Access

Enhancing Corporate ESG Performance Through Policy Pilots — A Quasi-Natural Experiment and Mechanism Analysis Based on New Energy Demonstration Cities

Zhongtao Xu ^1*

¹ Fudan University

^*Corresponding author: 23300660006@m.fudan.edu.cn

Published on 11 November 2025

AEMPS Vol.239

ISSN (Print): 2754-1177

ISSN (Online): 2754-1169

ISBN (Print): 978-1-80590-525-7

ISBN (Online): 978-1-80590-526-4

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Abstract

Against the backdrop of global energy transition and green development, academics and policymakers are widely interested in how government energy policies influence corporate sustainability practices. This article focuses on China's New Energy Demonstration City policy (NEDC). It conducts an empirical study, employing a difference-in-differences (DID) design to examine its effects on environmental, social, and governance (ESG) outcomes. Empirical research indicates that the NEDC has significantly enhanced the ESG ratings of companies in pilot cities, with this impact exhibiting a consistent positive trend across all three dimensions: environmental, social, and governance. Mechanism analysis reveals that the NEDC improves ESG metrics through three pathways: enhancing total factor productivity, stimulating green innovation, and promoting digital transformation. This conclusion validates previously established hypotheses, contributes to ESG economics theory, and provides empirical evidence for government policymaking on green transitions. Overall, the findings highlight the crucial role of targeted energy policies in fostering corporate sustainability and offer insights for advancing global low-carbon transformation.

Keywords:

Energy Transition Policy, Environmental, Social, and Governance Performance, Difference-In-Differences (DID), Mechanism Testing

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References

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References

[3]. Porter, M. E., & van der Linde, C. (1995). Toward a new conception of the environment-competitiveness relationship. Journal of Economic Perspectives, 9(4), 97–118.

[6]. Fang, Z., Luo, Q., Ye, K., & Zhao, X. (2023). Environmental regulation, green innovation, and ESG performance: Evidence from Chinese listed companies. Journal of Cleaner Production, 395, 136320

[7]. Kudamatsu, M. (2012). Has democratization reduced infant mortality in sub-Saharan Africa? Evidence from microdata. Journal of the European Economic Association, 10(6), 1294–1317.

[10]. Peng P, Sun M. (2024). Government subsidies and corporate environmental, social and governance performance: Evidence from companies of China. International Studies of Economics, 19(3): 374-405.

Cite this article

Xu,Z. (2025). Enhancing Corporate ESG Performance Through Policy Pilots — A Quasi-Natural Experiment and Mechanism Analysis Based on New Energy Demonstration Cities. Advances in Economics, Management and Political Sciences,239,76-85.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICFTBA 2025 Symposium: Data-Driven Decision Making in Business and Economics

ISBN: 978-1-80590-525-7(Print) / 978-1-80590-526-4(Online)

Editor: Lukášak Varti

Conference website: https://2025.icftba.org/Bratislava.html

Conference date: 12 December 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.239

ISSN: 2754-1169(Print) / 2754-1177(Online)

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