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CEPI & ESG greenwashing: Exec. attention view

Fs to implement initiatives that align with regulatory supports hypothesis 2. When firms possess higher
expectations. To avoid regulatory penalties, high- levels of Fs, executives tend to pay more attention to
power CEOs may leverage Fs to drive corporate green driving environmental performance in environment-
upgrading and reduce pollutant emissions. Under such related decision-making and resource allocation.
circumstances of green production, ESG Gws becomes However, the insignificant role of Fs during the
inherently unnecessary. inspection year reflects the complexity and short-
sightedness of firms’ initial coping strategies.
7. Conclusion and implications This finding emphasizes the importance of Fs in
facilitating environmental governance and provides
7.1. Conclusion an option for firms to respond to environmental
This study employed panel data of Chinese A-share– policy pressures through financial strategies.
listed firms in Shanghai and Shenzhen from 2013 to (iii) The heterogeneity analysis reveals that enterprises
2022 to empirically analyze the impact of CEPI on of different ownership types and in different regions
corporate ESG Gws behaviors and the moderating exhibit significant differences in their responses to
role of Fs between the two using a two-way fixed CEPI. Specifically, SOEs and enterprises located
effects model. Based on this analysis, the study further in central and western regions show a more
examined the heterogeneity of different firms to draw pronounced reduction in ESG Gws behaviors. In
the following conclusions: addition, the analysis of executive heterogeneity
(i) The impact of CEPI inspections on corporate ESG indicates that enterprises with CEO duality, as
Gws behavior exhibits clear temporal differences. well as those with executives possessing financial
During the inspection year, the regression coefficient backgrounds and postgraduate degrees, perform
is 0.084 with a p<0.01, indicating a significant more effectively in environmental information
increase in corporate ESG Gws behaviors. This may disclosure and environmental protection. Further
be attributed to the lag in information disclosure analysis finds that CEOs with higher power are
and the lagged effects of corporate coping strategies more proactive in leveraging Fs to meet policy
and policy responses. These findings support requirements. This offers a new perspective for
hypothesis 1a, but only limited to the year of the understanding how different enterprises respond to
inspection. However, in the following year, the environmental policies and provides targeted policy
regression coefficient is −0.09, with a p<0.05, recommendations for policymakers.
suggesting a significant suppression of corporate
ESG Gws behavior. This supports hypothesis 7.2. Implications
1b, which holds only after the second year of the This paper finds that the CEPI system has a far-reaching
inspection, indicating that as CEPI enforcement impact on corporate ESG Gws. These findings have
continues and deepens, enterprises begin to take different insights and significance for the corresponding
environmental compliance more seriously, reducing central supervision, local governments, and individual
inconsistency between words and actions. This enterprises, contributing new theories and ideas for
effect likely results from mounting policy pressure, the harmonious development of China’s economy and
which prompts enterprises to implement green environment.
rectification measures, although with a delayed In the context of CEPI becoming the norm, enterprises
effect. Furthermore, a series of robustness tests should start from the following aspects to enhance
confirms that the impact of CEPI on corporate ESG environmental protection and practice the goals of CEPI
Gws behaviors is robust and reliable, indicating that with high quality. First of all, the ESG vision should be
the research findings have strong credibility and strengthened. Enterprises should deeply recognize the
generalizability. key significance of ESG concepts for their sustainable
(ii) From the executive attention perspective, Fs plays development, actively promoting substantive green
a moderating role in the relationship between CEPI changes, reducing symbolic environmental protection
and corporate ESG Gws. Specifically, in the one- behaviors, and enhancing their long-term competitiveness
period lag model, the coefficient of the interaction and social responsibility. Second, the disclosure process
term between Fs and CEPI is 0.042 with a p<0.05, should be standardized. Firms should ensure detailed
indicating that Fs enhances the inhibitory effect of and truthful disclosure of their ESG policies, measures,
inspections on corporate ESG Gws. This finding performance, and future plans in accordance with

Volume 22 Issue 4 (2025) 235 doi: 10.36922/AJWEP025280219