The Impact of Corporate ESG Performance on Corporate Green Innovation

Abstract

The incorporation of green innovation by firms is considered essential to attain superior developmental outcomes. This study aims to examine how ESG (Environmental, Social, and Governance) performance influences green innovation and delve into the mechanisms that facilitate its implementation based on data spanning from 2011 to 2021, with a particular emphasis on companies listed on the A-share market in China. Its primary. The research findings substantiate that robust ESG performance by enterprises plays a pivotal role in driving green innovation. This influence can be attributed to several key factors within the implementation mechanism. Firstly, companies exhibiting excellence in ESG performance tend to demonstrate heightened social responsibility. Secondly, commitment to comprehensive and transparent information disclosure practices is more pronounced among such companies. Lastly, easier navigation of financing constraints is often observed, facilitating their green innovation initiatives.Drawing upon this analysis, valuable suggestions are proposed, emanating from ESG information disclosure practices and their influence on fostering green innovation. The study underscores the importance of integrating environmental, social, and governance considerations into corporate strategies as a means to usher in an era of sustainable, high-quality development for firms.