The role of ESG risk assessment in corporate projects : a multidimensional theoretical and empirical analysis

Abstract

This study examines the multidimensional role of ESG risk assessment in corporate projects through theoretical frame works (stakeholder theory, institutional complexity) and empirical analysis of Chinese A-share manufacturing firms (2013- 2023; 23,660 observations). Key findings reveal ESG performance significantly enhances corporate high-quality development (β=0.185, p<0.01), with environmental risk management showing the strongest marginal impact. Digital transformation acts as a critical positive moderator: each 1-unit increase in digitization amplifies ESG’s value contribution by 23.7% through dual mechanisms – efficiency gains (e.g., blockchain reducing ESG report errors by 65%) and signal enhancement (IoT data increasing green premiums by 2.3%). Significant industry heterogeneity exists: high-tech firms achieve higher ESG governance efficiency (0.9071) versus traditional manufacturers (0.3994), attributed to green innovation synergies. Institutional complexity (e.g., conflicting domestic/international rating weights) drives ESG rating divergences, prompting the proposed "Dynamic Adaptive Governance Framework." This framework advocates risk quantification via an ESG Risk Matrix (e.g., CO2 intensity × carbon price sensitivity), differentiated resource allocation (high-tech: 2.5%–3.2% revenue for R&D; traditional: 55% ESG budget to environmental tech), and institutional adaptation ("GLOBE-Local" strategies like emphasizing religious respect in Southeast Asia). Methodologically, the DN-DDF efficiency model uncovers stage-specific bottlenecks, showing sustainability phases lag profitability stages by 7.4% efficiency. Practical implications include leveraging digital tools for ESG compliance and customizing governance by industry/region. Limitations involve environmental data gaps and dynamic external shocks. The research validates ESG’s economic value through multidimensional risk interactions, establishes digitization as a key enabler, and provides actionable benchmarks for complex institutional environments.