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Impact of digital finance on corporate ESG

Author

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  • Wu, Ke
  • Zhang, Yongfang
  • Chen, Ying
  • Li, Miao

Abstract

In the context of the profound integration between China's dual carbon peak and neutrality goals and the rapidly expanding digital economy, whether and how digital finance can empower enterprises' sustainable development has become a popular research topic. Using panel data of Chinese A-share listed companies from 2011 to 2021, we empirically examine the impact of digital finance on environmental, social, and corporate governance (ESG). Findings reveal that digital finance has a significant positive impact on corporate ESG. Mechanistically, digital finance has the potential to enhance corporate ESG performance by encouraging corporate green innovation and enhancing corporate environmental information disclosure. Heterogeneity analysis reveals that digital finance has a heterogeneous impact on ESG performance, depending on firm size, corporate ownership, finance, and market development. Based on our findings, we propose policy recommendations that include deepening the integration of digital finance with green technologies, optimizing the design of ESG financing products and information disclosure mechanisms, and enhancing targeted support for various regions and industries

Suggested Citation

  • Wu, Ke & Zhang, Yongfang & Chen, Ying & Li, Miao, 2025. "Impact of digital finance on corporate ESG," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    • Handle: RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003461
    DOI: 10.1016/j.irfa.2025.104259
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