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of which in turn support the process of enterprise At this time, enterprises facing such high-pressure
sustainable development. In particular, by bringing environmental regulations may over-promote their
corporate executive attention and public attention, environmental image to reduce the possibility of being
CEPI has boosted endogenous motivation and the inspected. Second, neoclassical economics suggest that
vitality of green innovation in corporations through environmental regulation tends to significantly increase
the synergistic effect of internal and external factors. the cost of firms’ compliance with the system, i.e.,
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As a result, corporate environmental performance and environmental regulation may take up funds that firms
ESG practices have steadily improved. In addition, would otherwise use for production, thus hindering
some researchers have examined how corporate Gws firms’ development. In this case, firms may be tempted
is affected by green funding and low-carbon city to adopt behaviors that only temporarily comply with
pilot programs in comparable policy environments. regulations due to financial pressures, and therefore,
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According to relevant studies, for example, corporate environmental regulations may, to some extent, have
ESG Gws is not considerably worsened by green a crowding-out effect on corporate ESG practices and
finance, whereas it is dramatically improved by low- have reservations in implementing ESG. Third, under
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carbon city pilot programs. 34 the attention-based view, executive attention affects
To summarize, existing studies have corroborated corporate behavior and decision-making, and after
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the positive impact of CEPI on the improvement of noticing CEPI, may engage in symbolic green behaviors
corporate environmental performance and ESG ratings. in response to environmental inspections and to cater to
Meanwhile, scholarly inquiries have been conducted consumers’ preference for green products.
into the effects of green governance-oriented policies— (i) Hypothesis 1a: CEPI inspections will promote
such as green finance initiatives and low-carbon city enterprises’ ESG Gws behavior.
pilot policies—on corporate ESG Gws. Nevertheless, On the contrary, CEPI may reduce corporate Gws
the mechanisms and specific effects through which practices. On the one hand, CEPI, by virtue of its centralized
the CEPI system, as another green governance- authority, has penetrated the environmental governance
oriented policy instrument, influences corporate ESG work of provincial and municipal party committees
enhancement remain to be further explored. In addition, and governments, with the goal of vertical inspections
even fewer scholars have considered incorporating Fs and refining environmental governance. During the
to explore whether CEPI exerts an impact on corporate actual inspections, the “surprise inspections” allow the
ESG Gws. inspected areas to face a strong deterrent, prompting local
officials to strengthen environmental law enforcement
3. Research hypothesis and strict supervision, and promoting enterprises to pay
attention to environmental protection and consolidate the
Two hypotheses were proposed in this study. The first foundation of governance. Meanwhile, firms are bound
posited that CEPI significantly influences corporate by environmental regulations and are under pressure
ESG Gws behavior and was further divided into two for legitimacy. When executives perceive the intensity
competing sub-hypotheses to capture the potential of the policy, they will be more proactive and disclose
direction of the effect. The second suggested that the information in a comprehensive and truthful manner
impact of CEPI on ESG Gws behavior can be positively to demonstrate operational compliance. This allows
modulated by Fs. The hypotheses are as follows: higher regulators to understand the company’s environmental
environmental regulations will increase pressure on firms protection actions, effectiveness, and planning, thus
to protect the environment, while firms may implement maintaining the legitimacy of the operation and enhancing
ESG Gws strategies to cope with inspections. First, the trust between regulators and the public.
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unlike the traditional hierarchical system of the On the other hand, CEPI has been effective in
environmental protection department, CEPI is a vertical mobilizing public participation. It has effectively
environmental protection policy, in which the central reduced information asymmetry by accepting letters
government directly grants a high degree of power and reports from the public. If a company adopts
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to the inspection team. On the basis of “supervising Gws behavior that is contrary to its words and actions,
enterprises” and “supervising the government,” it the information related to the violation of the law will
focuses on strengthening the “party and government easily be fed back to the inspection team, leading to the
co-responsibility” and “double responsibility” system intervention of the supervisory department, undoubtedly
of environmental protection in the inspected area. increasing the exposure risk of the company’s Gws

Volume 22 Issue 4 (2025) 222 doi: 10.36922/AJWEP025280219