Government Environmental Attention and Corporate ESG Performance

Local governments play a pivotal role in fostering a harmonious coexistence between ecological conservation and high-quality economic growth. Their focus on the environment profoundly influences the ESG strategic choices of businesses within their jurisdiction. Based on the organizational attention theory and the matching data of Chinese provincial Government Work Reports from 2010 to 2022, and Shanghai and Shenzhen A-share listed companies, this paper empirically examines the impact of local government environmental attention on corporate ESG performance and its mechanism. The results show that the environmental attention of local governments contributes to the improvement of corporate ESG performance, with an average increase of 0.512% for every one standard deviation increase in government environmental attention. And it mainly plays a role through channels such as increasing investment in regional environmental pollution control and enhancing the green awareness of corporate executives. Further analysis shows that this positive effect is more significant in non-state-owned enterprises, non-heavy pollution enterprises, and mature enterprises. Economic consequence analysis shows that the local government environmental attention can improve the quality of corporate information disclosure, alleviating financing constraints and promoting the high-quality development of enterprises by improving corporate ESG performance. The research conclusion offers a theoretical foundation and strategic guidance for local governments to enhance the efficiency of environmental attention allocation, steer enterprises towards robust ESG system development, and ensure the realization of "dual carbon" goals.