How does ESG Performance Affect Corporate Financial Performance: Based on the Dual-track Case Comparison of the New Energy and Traditional Energy Industries

School of Accountancy, Central University of Finance and Economics, 100081, 39 Xueyuan South Road, Beijing, China

^* Corresponding author: 2022310689@email.cufe.edu.cn

Abstract

This paper explores the influence mechanism and industry heterogeneity of ESG performance on corporate financial performance through a literature review and a dual-track case comparison. The research finds that ESG positively affects financial performance mainly through five pathways: reducing financing costs, obtaining government subsidies, improving operational efficiency, enhancing brand reputation, and attracting talent. Based on the case comparison of CATL (new energy) and Sinopec (traditional energy), this article reveals the core moderating role of industry differences: the new energy industry, relying on its green attributes, is more likely to obtain policy support and financing advantages, and ESG performance consolidates its cost competitiveness; the traditional energy industry, on the other hand, reduces risk premiums, alleviates reputation pressure, and gains transformation policy support through ESG transformation. The study emphasizes that enterprises need to formulate differentiated ESG strategies in line with industry characteristics, providing reference for investors’ decision-making, enterprise develpment and governments’ policy formulation.