Non‐state shareholder governance and corporate sustainability: Evidence from environmental, social and governance ratings

Abstract We study how non‐state shareholder governance affects the performance of corporate environmental, social and governance (hereinafter ESG). We select all A‐shares state‐owned listed companies on the Shanghai and Shenzhen stock exchanges from 2011 to 2020 as the research sample. We find that non‐state shareholder governance can improve the ESG ratings by improving green innovation and information transparency. Further analysis shows that non‐state shareholder governance has a significant impact on the ESG ratings of polluting industries, high degree of marketization area, and high competitive industries; the enthusiasm of non‐state shareholders to participate in shareholders' meeting has a great impact on the ESG ratings. This research enriches the influence of non‐state shareholder governance and provides channels for state‐owned enterprises to improve ESG ratings. In addition, this article has important practical significance for state‐owned enterprises to deepen reform and strengthen environmental governance.