The ESG Performance Affects the Cost of Corporate Debt Financing-Based on the Vertical Analysis of Trina Solar

Abstract

Against the backdrop of China ' s " dual carbon " goals and the deepening of green finance, how corporate Environmental, Social, Governance (ESG) performance affects debt financing costs has become a critical issue. This study focuses on Trina Solar, a leading photovoltaic company, using its panel data and ESG reports from 2020 to 2025 for analysis. The findings reveal that while ESG scores show no simple linear correlation with interest-bearing debt ratios during rapid corporate expansion, controlling for scale, leverage, and growth, im-proved ESG performance significantly and independently reduces interest - bearing debt ratios, confirming its " net effect " of lowering financing costs through signalling. ESG disclosures do not immediately optimize debt maturity structures, as their value realization exhibits time lags and contextual dependencies, influenced by corporate strategic phases and financing priorities. For growth-stage enterprises, ESG financing optimization effects often intertwine with scale effects, requiring a gradual release through building a sustainable reputation and reducing long-term risks. This study provides dynamic micro-level evidence on the relationship between ESG and debt costs, offering decision - making references for strategic expansion - stage companies to balance scale growth with ESG investments and plan long - term financing structures.