The impact of climate change on corporate ESG performance: The role of resource misallocation in enterprises

In recent years, the negative consequences of climate change have gradually spread to the real economy sector, which affects enterprise output, increases enterprise costs, and thus inhibits the sustainable development of enterprises. Still, it is not clear whether corporate resource misallocation will reinforce the effect. Therefore, using the data of A-share listed companies in 2011-2021, this paper investigates the impact of climate change on corporate environmental, social, and governance (ESG) performance. According to empirical results, climate change significantly inhibits corporate ESG performance. It also found that continuously eliminating internal and external resource misallocation helps alleviate the adverse effects of climate change on ESG performance. Furthermore, compared with enterprises in non-resource-based cities, climate change will significantly improve corporate ESG performance in resource-based cities, indicating that the adaptive behavior caused by climate change has partially broken the resource curse phenomenon. Additionally, mature and large-scale enterprises mitigate the negative effects better, and external pressure from the public environmental and analysts' attention can motivate companies to improve their ESG performance. The research enriches the research on the impact of climate change on corporate ESG performance and provides a reference basis for enterprises to cope with climate risks.