Greenwashing and Cost of Debt: Analyzing the Impact of ESG Disclosure Quality in Chinese Listed Companies

DOI

10.2991/978-94-6463-642-0_17How to use a DOI?

Keywords

ESG Information Disclosure; Greenwashing Index; Cost of Debt; Corporate Nature of Ownership; Panel Regression

Abstract

Environmental, Social, and Governance (ESG) information disclosure serves as a critical benchmark for assessing a company’s capacity for sustainable development. High-quality ESG disclosure entails the provision of comprehensive, precise, and timely information, complemented by demonstrable performance and future objectives in the relevant domains. The cost of debt pertains to the interest and associated expenses incurred by companies when sourcing funds through bond issuance, bank loans, or similar financial mechanisms. Enhanced ESG disclosure quality augments the transparency of corporate information, thereby enabling potential creditors to perform a more thorough risk appraisal of the firm. This study leverages data from non-financial firms listed on China’s Shanghai, Shenzhen, and Beijing A-share markets from 2012 to 2022. Employing the Greenwashing index as a proxy for ESG disclosure quality, this research investigates the influence of ESG disclosure quality on corporate cost of debt. The findings indicate that entities engaging in greenwashing tend to experience reduced cost of debt. This phenomenon may be attributed to the absence of standardized ESG evaluation criteria, which allows greenwashing practices to achieve market acceptance in the short term. Moreover, the analysis reveals a more pronounced negative impact of the greenwashing index on cost of debt among non-state-owned enterprises. This paper advocates for the enhancement of ESG disclosure standards and regulatory frameworks to improve corporate ESG transparency.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Qidong Yao
PY  - 2025
DA  - 2025/01/24
TI  - Greenwashing and Cost of Debt: Analyzing the Impact of ESG Disclosure Quality in Chinese Listed Companies
BT  - Proceedings of 2024 6th International Conference on Economic Management and Cultural Industry (ICEMCI 2024)
PB  - Atlantis Press
SP  - 161
EP  - 169
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-642-0_17
DO  - 10.2991/978-94-6463-642-0_17
ID  - Yao2025
ER  -