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Environment Innovation and ESG Performance in EU Firms: Exploring the Impact of Environmental Innovation on Sustainability Outcomes

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  • Mujtaba Momin
  • Suzan Dsouza
  • Ariz Naqvi
  • Rini Rini

Abstract

This study examines the influence of environmental innovation on key sustainability outcomes, namely ESG performance, workforce satisfaction, and SDG 9 adoption, among firms operating in the European Union. Using a panel of 5155 firm‐year observations across 952 companies from 2010 to 2024, the analysis draws on Refinitiv data and applies firm‐fixed effects regressions and dynamic system‐GMM estimation to address endogeneity and unobserved heterogeneity. The results indicate that environmental innovation has a consistently positive effect on ESG ratings (β ≈ 0.13, p

Suggested Citation

  • Mujtaba Momin & Suzan Dsouza & Ariz Naqvi & Rini Rini, 2026. "Environment Innovation and ESG Performance in EU Firms: Exploring the Impact of Environmental Innovation on Sustainability Outcomes," Business Strategy and the Environment, Wiley Blackwell, vol. 35(4), pages 4925-4941, May.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:4:p:4925-4941
    DOI: 10.1002/bse.70411
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