The Relationship between ESG Performance and Corporate Performance - Based on Stakeholder Theory

Financial management (big data financial decision-making), Henan Agricultural University, Henan, China

Email: 1192072751@qq.com

Abstract

Stakeholder theory has been widely used in business management research by scholars of various disciplines at home and abroad. Initially, stakeholder theory asserted that the growth of any company is inseparable from stakeholders, emphasizing the consideration of stakeholders when making or implementing decisions. However, in recent years, with the deepening of theoretical research, the scope of stakeholder theory research has been expanding, and environmental, social and governance (ESG) has become one of the important aspects of stakeholder theory research. This paper explores the relationship between ESG, and corporate performance based on stakeholder theory. Stakeholder theory suggests that by demonstrating strong ESG performance, companies can gain buy-in from both external and internal stakeholders. ESG can meet the needs of both external and internal stakeholders. As a result, it not only enhances the brand image, but also improves operational efficiency, which in turn improves the quality of sales and services. Ultimately, this helps to improve business performance.