How Does Digital Transformation Impact ESG Performance in Uncertain Environments?

Jie Li, Ning Ding, Sambock Bock Park and Zhu Zhang ()
Additional contact information
Jie Li: Department of Accounting, School of Accountancy, Luoyang Institute of Science and Technology, Luoyang 471023, China
Ning Ding: Accounting Department, Jeonbuk National University, Jeonju 54896, Republic of Korea
Sambock Bock Park: Accounting Department, Jeonbuk National University, Jeonju 54896, Republic of Korea
Zhu Zhang: Accounting Department, Jeonbuk National University, Jeonju 54896, Republic of Korea

Sustainability, 2025, vol. 17, issue 10, 1-30

Abstract: The influence of digital transformation on ESG performance has garnered considerable interest; however, previous research in this area has not adequately considered the influence of environmental uncertainty factors. This study utilized a dataset comprising Chinese A-share listed companies from 2009 to 2023 to explore how environmental uncertainty affects the correlation between digital transformation and ESG performance. Furthermore, we also examined potential pathways and heterogeneity. Our findings demonstrate that digital transformation significantly enhances ESG performance, with the positive effects persisting for up to three years post-implementation, although gradually diminishing in intensity. However, environmental uncertainty substantially reduces this positive impact across all pivotal technologies. Improvements in ESG performance are more pronounced in firms that are high-tech, technology-intensive, and capital-intensive and that do not produce heavy pollution. Quantile regression reveals that firms in the upper–middle ESG performance range benefit most. Our mediation analysis confirms that digital transformation enhances ESG performance by increasing firm value, media attention, and analyst coverage. Overall, this study contributes to the existing literature by providing empirical evidence of the impacts of environmental uncertainty. These findings provide strategic guidance for companies navigating digital transformation initiatives in turbulent business environments, while also offering concrete recommendations for regulatory authorities developing ESG disclosure frameworks and digital infrastructure investment priorities tailored to different uncertainty conditions.

Keywords: digital transformation; ESG; environmental uncertainty; heterogeneity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/10/4597/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/10/4597/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:10:p:4597-:d:1658033

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().