ESG Information Disclosure of Listed Companies Based on Entropy Weight Algorithm Under the Background of Double Carbon

Introduction

ESG refers to environment, society, and governance and is a concentrated expression of corporate responsibility. The COVID-19 epidemic, an extreme global climate, and frequent natural disasters have led to unprecedented societal challenges. People from all walks of life are paying more and more attention to the ESG performance of enterprises, ESG information disclosure, and the related capital market. As an effective means to reduce information asymmetry with external stakeholders, the information disclosure of listed companies has gradually become the basis for effective market operation (Zhang et al., 2020). ESG information disclosure is causing a shift from quantity growth to quality improvement, voluntary disclosure to mandatory disclosure, and single exposure to comprehensive disclosure (Parsian et al., 2018). In practice, the concept mainly takes the form of a company report, and the corresponding application system includes ESG information disclosure, ESG assessment, and ESG investment (Beekes et al., 2016; Masud et al., 2017). Sustainable development requires the coordination of enterprise behavior with environmental changes and social development. As global climate change becomes increasingly severe, the ESG assessment system offers society a new perspective and standard to examine and assess enterprises’ sustainable development behavior, performance, and potential (Cheng et al., 2017). China can actively learn from international experiences with ESG information disclosure, fully consider the actual situation of listed companies in China, and gradually establish and improve its ESG information disclosure system for listed companies. This would allow China’s capital market to effectively enhance its international competitiveness and sustainable development capacity.

Against the backdrop of China’s top-down commitment to achieving its “double carbon target” through the support and guidance of green finance, investment concepts such as green and low carbon should gradually take root in people’s hearts, helping to realize this goal (Rietz, 2014). An ESG rating and information disclosure mechanism is a practical starting point for transforming society’s investment and financing activities in a greener, low-carbon, sustainable development direction. An information disclosure system comprises a series of principles and rules. It is a fundamental institutional system for maintaining fair trade in the securities market and protecting the interests of investors (Lee et al., 2022). To ensure fair and efficient issuance, the obligation to disclose information on issuers has become an essential means to balance the information asymmetry between issuers and investors (Giese et al., 2019). The frequent violations of information disclosure in China’s capital market and the corresponding assessment of information disclosure quality have aroused widespread concern in academic and practical circles, becoming a research focus in accounting and finance in recent years. Under the guidance of the “double carbon target,” China is accelerating the construction of an ESG assessment system in which the disclosure of enterprise ESG information is the crucial link (Zhou et al., 2021). Based on the strategic objectives of peak carbon dioxide emissions and carbon neutrality, this paper analyzes the current progress of ESG governance in the domestic banking industry and studies the ESG information disclosure quality assessment method for listed companies based on the entropy weight algorithm.