Does Saying Good Things Mean Doing Good Things?——A Study Based on the Readability of ESG Reports
Based on a sample of 7,975 ESG reports issued by Chinese A-share listed companies over the past 10 years,this paper examines the relationship between the ESG performance of listed companies and the readability of their ESG reports.The results show a significant positive correlation between ESG report readability and ESG performance,indicating that the readability of a firm's ESG report is a meaningful reflection of its ESG perform-ance.Further analysis reveals two key findings:first,for companies with higher ESG report readability,ESG per-formance improves as analyst attention increases.This suggests that analysts pay more attention to companies with more readable ESG reports and apply public pressure as an external monitoring force,thereby enhancing the compa-nies'ESG performance.Second,when examining the relationship between ESG report readability and individual ESG rating components,it is found that ESG report readability is significantly positively correlated with employee performance but negatively correlated with environmental performance.Additionally,after applying instrumental variables to address potential endogeneity concerns and conducting a series of robustness tests,the findings consist-ently demonstrate that ESG report readability remains significantly associated with ESG performance.
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