Can Corporate ESG Performance Enhance Corporate Value? ——Based on the Mediating Effect of Internal Control

Abstract

As important entities in economic development, corporations must ensure their own operations and also take on relevant social responsibilities, with ESG performance becoming an external card for corporations to demonstrate social responsibility. This paper uses financial data from A-share listed companies from 2018 to 2022 to explore the impact of ESG performance on corporate value and its influencing path, further investigating the mediating role of internal control in this relationship. Specifically, it further analyzes whether environment (E), social responsibility (S), and corporate governance (G) can separately influence corporate value. The final study shows that good ESG performance can indeed enhance corporate value by improving corporate reputation, affecting capital costs, and improving internal governance and financial performance, with internal control playing a mediating role. Further analysis confirmed that environment (E) and social responsibility (S) can each individually have a significant impact on corporate value, while corporate governance (G) alone does not have a significant impact. Based on the above research conclusions, corresponding recommendations and strategies are proposed for the ESG development of listed companies, aiming to improve the operational quality and sustainable development capacity of companies in various industries in China and to promote the stable development of China's listed companies through ESG measures.Moreover, companies should integrate their ESG strategies with the United Nations Sustainable Development Goals (SDGs) to foster synergies among economic growth, environmental stewardship, and social well-being, thereby contributing to a sustainable global future.