Abstract: This paper examines the impact of the new Environmental Protection Law on corporate ESG performance and the moderating effects of executive compensation and government subsidies using the difference-in-differences (DID) model. The study found that the implementation of the new Environmental Protection Law significantly improved the ESG performance of listed companies in China's heavily polluting industries. Executive compensation and government subsidies can positively moderate the relationship between the new Environmental Protection Law and ESG. The boosting effect of the new Environmental Protection Law on corporate ESG performance is stronger in the grouping of high rule of law levels, high media attention and large corporations. Under the double carbon target, this study is of great significance to realize the sustainable development of enterprises and the high quality development of national economy.

Keywords: Environmental regulation; ESG; Executive compensation; Government subsidies; China’s new environmental protection law

JEL codes: C33, K32, Q56

DOI: ...