Essays on ESG Disclosure Policies

Author

Zhuolin Li, CUNY Graduate CenterFollow

Date of Degree

6-2025

Document Type

Doctoral Dissertation

Degree Name

Doctor of Philosophy

Program

Economics

Advisor

Lin Peng

Committee Members

Christos Giannikos

Jun Wang

Subject Categories

Accounting | Business and Corporate Communications | Business Law, Public Responsibility, and Ethics | Corporate Finance | Finance and Financial Management

Abstract

Environmental, Social, and Governance (ESG) frameworks are increasingly adopted worldwide as countries implement non-financial disclosure policies to address climate-related risks. This dissertation comprises two chapters, each examining climate mitigation policies in China and drawing comparisons with international practices to identify effective strategies and offer policy recommendations. The research focuses on the role of financial sector policies in addressing ESG data gaps that impede the identification, management, and mitigation of climate-related risks. In particular, it evaluates the economic implications of climate mitigation policies and investigates the impact of different disclosure regimes—such as voluntary guidance and the “comply or explain” approach—on corporate behavior. By focusing on the Chinese context, this dissertation provides insights into how disclosure-based regulatory tools influence firm-level practices in emerging markets.

Chapter 1: As global regulators increasingly adopt non-financial disclosure mandates, understanding the design and effectiveness of such policies has become critical. This paper evaluates the impact of Hong Kong’s staggered ESG (Environmental, Social, and Governance) disclosure regulations—specifically, the 2012 voluntary guidance and the 2015 soft mandatory “comply or explain” requirement—using a difference-in-differences approach and the unique institutional setting of Hong Kong–Mainland China dual-listed firms. The findings show that the 2015 mandate significantly increased the disclosure of quantitative carbon and pollutant emissions, whereas the 2012 voluntary regime had no discernible effect. However, quantitative disclosure remains incomplete: a substantial proportion of firms continue to withhold carbon emissions data, likely due to concerns over litigation risks. This reluctance suggests that even soft mandates may create disincentives to disclose when firms anticipate potential legal exposure.

Chapter 2: The growing trend toward mandatory non-financial disclosures, such as the EU’s 2022 Corporate Sustainability Reporting Directive (CSRD) and the SEC’s proposed climate-related rules, has raised important questions about the real and financial impacts of ESG disclosure policies. This study investigates a soft “comply or explain” regime under limited shareholder pressure by exploiting the 2015 Hong Kong ESG mandate in a differencein- differences framework. I find no significant improvement in overall ESG scores, though emission scores rise, driven largely by increased transparency rather than substantive reductions, as evidenced by persistently low rates of quantitative emission reporting. Financial outcomes are heterogeneous: treated firms not subject to strict pollution oversight experience increases in Tobin’s Q and environmental investment, while heavily monitored firms face higher operating costs and declining profitability, without corresponding improvements in environmental performance. Social pillar scores also increase post-mandate, largely due to newly disclosed information from firms with weaker prior performance. These results suggest that while soft mandates may enhance ESG transparency, their real and financial effects are contingent on the regulatory environment and firm-level characteristics.

Recommended Citation

Li, Zhuolin, "Essays on ESG Disclosure Policies" (2025). CUNY Academic Works.
https://academicworks.cuny.edu/gc_etds/6340