Can Green Innovation Promote ESG Performance? Evidence From China

This study explores the impact of green innovation on Environmental, Social, and Governance (ESG) performance, utilizing a comprehensive dataset of 23,022 Chinese A-share listed companies over the period from 2013 to 2022. The analysis distinguishes between two forms of green innovation: green management innovation and green technology innovation. The findings demonstrate that both types significantly enhance corporate ESG performance. The results remain robust after accounting for potential endogeneity and conducting various robustness checks. This study also reveals that environmental attention partially mediates the relationship between green innovation and ESG performance by directing top executives’ cognitive focus toward sustainability. Meanwhile, R&D intensity moderates these effects by particularly enhancing the impact of green management innovation on ESG performance, whereas green technology innovation demonstrates a more direct influence and appears less reliant on R&D investments. This study contributes to the literature by elucidating the mechanisms through which green innovation influences corporate sustainability and provides practical insights for businesses and policymakers on promoting sustainable development. By highlighting the roles of environmental attention and R&D intensity, this study offers a comprehensive understanding of how firms can effectively leverage green innovation to improve their ESG performance, achieve competitive advantages, and meet growing stakeholder expectations for sustainable practices.