ESP-3773

Published

2025-05-30

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Vol. 10 No. 5 (2025): Published

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Research Articles

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Copyright (c) 2025 Can Cui, Fengda Wu

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How to Cite

Cui, C., & Wu, F. (2025). Discussing green financing, ESG interpretation and corporate value from a psychological perspective. Environment and Social Psychology, 10(5), ESP-3773. https://doi.org/10.59429/esp.v10i5.3773

Discussing green financing, ESG interpretation and corporate value from a psychological perspective

Can Cui

Faculty of Economics and Business, Universiti Malaysia Sarawak (UNIMAS), Kota Samarahan, Sarawak, 94300, Malaysia

Fengda Wu

Faculty of Psychology, Shinawatra University, Pathum Thani 12160, Thailand


DOI: https://doi.org/10.59429/esp.v10i5.3773


Keywords: green financing; ESG disclosure; firm value; sustainable finance; corporate performance; environmental governance

Abstract

This study explores the subtle link between green financing, ESG disclosure and firm value and takes a detailed journey into the ways in which ESG conduct impacts firm financial performance. We use advanced econometrics to exploit a robust dataset of 2,847 firms across 45 countries in 2018-2024 to examine the mediating role of ESG disclosure in the green finance-firm value nexus. We find that firms with higher ESG disclosure scores disclose a 12.3% higher market valuation when they take on green financing instruments. A novel Green Finance Performance Index (GFPI) is introduced and we show that ESG transparency plays a critical mediator, accounting for 34.7% of the variability in the green financing-firm values relationship. We also find that the effects are quite different across industries: renewable energy and technology sectors have the strongest positive correlations while real estate is the most negatively correlated. The implications of these results are far reaching for corporate strategy, investor decision making and regulatory policy in the emerging terrain of sustainable finance.

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