ESG Performance and Green Innovation Nexus: Insights From Indian Manufacturing Titans

Mithilesh Gidage and Shilpa Bhide

Business Strategy and the Environment, 2025, vol. 34, issue 7, 8686-8703

Abstract: The existing literature highlights the influence of green intellectual capital (GIC), green finance (GF), and green innovation (GI) on firms' environmental performance; however, significant gaps persist regarding their impact on ESG performance. To address this gap, our study delves into the intricate interplay between GIC, GF, GI, and ESG performance. In this study, we posit that the interplay among GIC, GF, GI, and ESG performance is more complex than traditionally acknowledged. Contrary to previous assumptions, we posit that GIC and GF do not directly correlate with ESG performance. Instead, we propose that GI acts as a mediator between GIC, GF, and ESG performance. Moreover, we argue that ESG strategies not only directly affect ESG performance but also moderate the relationship between GI and ESG outcomes. To substantiate our assertions, we employ structural equation modeling using data collected from senior decision‐makers in 77 Indian manufacturing firms listed on the NIFTY India Manufacturing Index. Our empirical findings provide robust support for most hypotheses, shedding light on the nuanced dynamics within the realm of ESG performance.

Date: 2025
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