Green vision, steady minds: the impact of corporate ESG performance on managerial perception of uncertainty

This study, based on the information asymmetry theory, aims to examine the impact of ESG on managerial perception of uncertainty, analyzing its mechanisms, influencing factor and economic implications.

This study uses panel data from Chinese A-share listed companies for the period 2010–2021 and tests the hypotheses using the ordinary least squares model.

The results of this study indicate that corporate environmental, social, and governance (ESG) performance significantly reduces managerial perception of uncertainty, particularly in the environmental (E) and social (S) dimensions. Mechanism tests show that ESG performance alleviates managerial perception of uncertainty by reducing information asymmetry between the company and its stakeholders. Moderation effect tests reveal that this mitigating effect is more pronounced when the company does not have political connections and when executives have green backgrounds. In addition, the extended analysis finds that improvements in ESG performance lead to a reduction in managerial perceptions of uncertainty, which, in turn, contributes to better financial performance.

This study makes significant contributions to the literature on factors influencing micro-level uncertainty perception and further enriches the literature on stakeholder responses to ESG performance. By introducing managerial perception of uncertainty as a novel theoretical lens, the research reframes the debate on ESG profitability. The findings underscore that strategic ESG practices can alleviate the perceived tension between sustainability and profitability, thereby challenging conventional assumptions about their incompatibility.