Leveraging Digitalization to Boost ESG Performance in Different Business Contexts

Gomaa Agag (), Sameh Aboul-Dahab, Sherif El-Halaby, Said Abdo and Mohamed A. Khashan
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Gomaa Agag: Nottingham Business School, Nottingham Trent University, Nottingham NG11 8NS, UK
Sameh Aboul-Dahab: Business Administration Department, Faculty of Commerce, Kafrelshiekh University, Sheikh 33516, Egypt
Sherif El-Halaby: Accounting Department, Business School, Brunel University, Uxbridge UB8 3PH, UK
Said Abdo: Business Management, Marketing Department, Nahda University, Beni Suef EU2 23UT, Egypt
Mohamed A. Khashan: Department of Business Administration, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh 13318, Saudi Arabia

Sustainability, 2025, vol. 17, issue 15, 1-31

Abstract: Digital technology has become an essential engine of green development and economic progress due to the meteoric rise of new technologies. Our paper seeks to explore the impact of digitalization on environmental, social and governance (ESG) performance in different business contexts. Data were collected from listed firms across 19 Asian countries from 2015 to 2024, covering 1839 firms, yielding 18,390 firm-year observations and establishing a balanced panel data set. We used the dynamic panel data model to test the proposed hypotheses. The findings revealed that digitalization has a significant and positive impact on ESG performance. It also revealed that environmental uncertainty moderates this relationship. Moreover, our analysis indicated that the impact of digitalization on ESG performance is stronger for product (vs. service) firms, stronger for B2B (vs. B2C) firms and stronger for firms in IT-intensive industries. In addition, the analysis indicated that the impact of digitalization on ESG performance is stronger in more dynamic, complex and munificent environments. Our examination offers meaningful implications for theory and practice by expanding our knowledge of the complex mechanism underpinning the positive correlation between digitalization and ESG performance.

Keywords: digitalization; ESG performance; B2B vs. B2C; product vs. service; environmental uncertainty (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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