Strategies and Considerations for Enterprises to Balance ESG in the Context of an Economic Downturn

Faculty of Mathematics, Shanghai University of Finance and Economics, 200433, Shanghai, China

^* Corresponding author: 2022110104@stu.sufe.edu.cn

Abstract

With the global economic situation complicating and China’s economic growth slowing, companies are facing challenges. At this period, ESG investing becomes increasingly important. Considering such a special period, this research aims to explore how companies can balance ESG strategies during economic downturns. Through qualitative analysis, the paper analyzes A-share listed companies’ financial performance under economic downward pressure. The paper also discusses how ESG investment effects corporate costs and discusses the advantages, disadvantages, opportunities and threats of investing ESG. The study found that while ESG investments may increase the financial burden on companies in the short term, they will bring significant economic benefits to companies in the long run. This study suggests that companies should adopt a flexible ESG strategy like prioritizing investments in ESG projects with high returns, using cost-benefit analysis to evaluate potential ESG investments, as well as adopting incremental ESG strategy improvements. In addition, enterprises should be in line with their actual conditions to make ESG strategies. Ultimately, this study offers practical advice on the strategies companies can employ to enhance competitiveness and achieve long-term sustainability during economic downturns.