Impact of green taxes and fees on corporate ESG performance

Abstract

New quality productive forces are green productive forces. As an important policy tool, green taxes and fees can affect corporate environmental, social, and governance (ESG) performance, promoting economic green transformation and high-quality development. This study empirically analyses the data of A-share listed companies from 2012 to 2022 and found that green taxes and fees significantly enhance the ESG performance of enterprises. However, in enterprises that bear substantial green tax burdens, such as those with heavy pollution loads, the enhancement effect of green taxes and fees on ESG performance is not as prominent as in other enterprises. Conversely, enterprises with lower institutional investor shareholding ratios and higher market valuations exhibit a stronger enhancement effect of green taxes and fees on their ESG performance. This result shows that the green tax system has achieved positive results and has practical significance in realizing the national “carbon neutrality and carbon peak” strategy. To better use the effect of green taxes and fees on the ESG performance of enterprises, expanding the scope of environmental protection tax, introducing a targeted tax system for heavily polluting enterprises, and promoting the promulgation and implementation of ESG mandatory disclosure policy.