Environmental self-regulation helps firms deal with regulation challenges by setting their own environmental standards. Firms adopt self-regulation to boost productivity, attract eco-conscious customers, manage public pressure, and comply with government rules and market competition. Factors like company size, research capabilities, and past environmental performance influence self-regulation adoption. Many Chinese firms struggle to implement self-regulation, but policies like sharing information and guiding investors can help. The government should support firms in enhancing their environmental practices.