Sustainable Development Goals

Abstract/Objectives

This study examines whether corporate sustainability performance enhances human capital. Using a difference-in-differences approach based on the implementation of Taiwan’s 2020 Green Finance Action Plan 2.0, we find that employee happiness improves in firms with higher TESG Sustainability Index ratings. ESG orientation and environmental improvements are key drivers of this effect. Heterogeneity analysis shows that the positive impact is stronger in firms with higher organizational identification and better workplace safety. Corporate sustainability performance strengthens the quality of human capital by improving employee well-being.

Results/Contributions

By integrating labor economics with sustainable finance, this study delivers the following contributions:

1. Empirical Evidence: It verifies that Corporate Sustainability Performance significantly boosts internal employee happiness and loyalty, highlighting the human capital benefits of ESG beyond external reputation.

2. Index Innovation: We constructed an objective "Employee Happiness Index" using data on salary, benefits, and training, overcoming survey bias.

3. Policy Verification: Using the Green Finance Action Plan 2.0, we identified that ESG-linked compensation and environmental investments are key mechanisms for enhancing employee trust.

4. Recognition: Awarded Honorable Mention in the 2025 Fubon Life Management Thesis Award, validating its academic and practical value.

Keywords

Corporate Sustainability PerformanceEmployee HappinessHuman CapitalESG OrientationEnvironmental Improvement