This study aims to examine the policy effects of the “Three-Year Action Plan to Win the Blue Sky War” on the steel industry and air pollution in China. Specifically, we analyze the impact of the “Blue Sky Plan” on Chinese steel companies’ ESG investments, corporate financial performance, and the emissions of sulfur dioxide and nitrogen oxides in the exhaust gas. Our evidence suggests that ESG investment in steel companies can lead to a significant decrease in financial performance. The “Blue Sky Plan” compensated for about one-third of corporate ESG investment losses and played a significant role in promoting the ESG investment of steel companies. In addition, we found that after the implementation of the “Blue Sky Plan,” the emissions of sulfur dioxide and nitrogen oxides in the exhaust gases were significantly reduced.
Air pollution was a serious issue in China in the early 2010s, threatening public health and sustainable economic development. The Chinese government established a new environmental protection law in 2015 in order to address air pollution and other environmental issues. This paper investigates the impact of the new environmental law and ESG investments on air pollution and social happiness. We discovered that the implementation of the new environmental law and ESG investments significantly improved social happiness by reducing air pollution. One unit increase in ESG investments would result in a 0.334 unit decrease in air pollution and 0.225 unit increase in social happiness.
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