Can ESG Disclosure Stimulate Corporations’ Sustainable Green Innovation Efforts? Evidence from China

Miao Li and Rajah Rasiah
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Miao Li: Asia-Europe Institute, Universiti Malaya, Kuala Lumpur 50603, Malaysia

Sustainability, 2024, vol. 16, issue 21, 1-20

Abstract: The Environmental, Social, and Governance (ESG) Composite Rating denotes corporations’ capability for supporting sustainable development activities, social responsibility, and transparent and ethical governance. It aims to inform investors and stakeholders about the company’s sustainability and social responsibility risks. ESG has increasingly become an informal yet significant driving force in promoting sustainable green innovation within the diversified co-governance environmental management system. This paper examines the dynamic relationship between ESG performance and sustainable green innovation practices in Chinese A-share listed companies from 2011 to 2022. The results show a positive correlation between ESG performance and the level of corporate sustainable green innovation. They also validate the moderating roles of informal external pressure and internal development demands. While the moderating effect of public environmental concern (PEC) is not significant, corporate digital transformation (CDT) significantly and positively moderates the relationship between ESG performance and sustainable green innovation. These findings offer policymakers and corporations a means to formulate a framework to shape the conduct of corporations to meet the market’s green development needs and to establish instruments that promote green innovation.

Keywords: ESG; sustainable green innovation; public environmental concern (PEC); corporate digital transformation (CDT) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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