Can the Promotion of Digitalization Enhance Enterprises' ESG Ratings?
-- Mediating Effect of Executives' Environmental Background
DOI:
https://doi.org/10.54097/w99t7c35Keywords:
Digitalization, ESG Ratings, Executives' Environmental BackgroundAbstract
The effect of digitalization on the ESG ratings of a firm is an essential area of debate. Utilizing data collected from A-share public enterprises between 2009 and 2022, this work investigates the implications and processes of digitalization on the ESG ratings of firms. The moderating influence of environmental backgrounds of executives is also examined. The following are the research findings. (1) Corporate ESG ratings has been greatly improved by digitalization. This finding is still reliable in a variety of tests. (2) The environmental backgrounds of executives intensify the positive association between ESG ratings of the firm and digitalization. (3) In accordance with the mechanistic analyses, digitalization advances an organization's ESG ratings through two main channels: strengthening the organization's green innovation and enhancing internal controls. (4) According to the heterogeneity study, strategically emergent, state-owned, eastern and central and significantly polluting businesses are more likely to be impacted by the influence of digitalization on ESG ratings of corporate. In light of this, it is strongly advocated that the government actively furnish policies and institutional circumstances to navigate the dissemination and application of ESG concepts. Meanwhile, it is recommended that enterprises grasp the opportunity of the country's vigorous advancement of digital development and empower all links of enterprise operation and management through digitalization.
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