The actual controller’ environmental background and corporate ESG performance: evidence from China

Based on Chinese A-share listed private firms from 2010 to 2023, we examine the impact of the actual controller’ environmental background on corporate ESG performance. We find that the actual controller’ environmental background significantly enhances corporate ESG performance. Heterogeneity analyses show this positive effect is more pronounced in regions with stricter environmental regulations, in heavily polluting industries, and in firms where the actual controller holds more shares. Moreover, mechanism tests confirm that the actual controller’ environmental background enhances ESG performance by promoting green innovation and raising environmental investment. Overall, our study documents the actual controller’ environmental governance effects and offers valuable insights for firms aiming to improve their ESG performance.