The Impact Mechanisms and Optimization Strategies of ESG Pillars on Brokerage Firm Valuation

Abstract

ESG has gradually shifted from a corporate social responsibility issue to an important framework for evaluating the long-term value of companies in the capital market. For securities firms, ESG is not simply about image building or compliance disclosure, but can influence market valuation through risk control, customer trust, capital costs, and business structure. Unlike high-emission industries, the value of securities firms in the environmental dimension is more reflected in their green financial service capabilities; the social dimension is mainly reflected in customer protection, investor education, employee professional competence, and data security; and the governance dimension is directly related to compliance risk, internal control, and valuation discounts. Based on relevant ESG research, this paper analyzes the mechanism by which the three sub-indicators of environment, society, and governance affect the valuation of securities firms and proposes optimization strategies. The study argues that the focus of securities firms’ ESG construction should not be limited to improving the overall score, but should emphasize the substantial connection between the sub-indicators and their main business, risk governance, and capital market intermediary functions.