Digital-green synergy in transition: Exploring the dual synergy transformation impact on corporate ESG performance

This study investigates the impact of digital-green synergy transformation on corporate Environmental, Social, and Governance (ESG) performance. Based on the textual data from annual reports, financial statements, and patent records, we use a coupling coordination degree model to quantify the digital-green synergy transformation level. Our empirical findings reveal that the digital-green synergy transformation significantly enhances ESG performance and positively impacts each E-S-G dimension. Mechanism analysis reveals that the improvement in ESG performance driven by the digital-green synergy transformation is primarily achieved through three key pathways: emission reduction and efficiency improvement; employment expansion and employee benefits improvement; and corporate information environment optimization. Moreover, the positive impact of digital-green synergy transformation on ESG performance is more pronounced in state-owned enterprises and enterprises with more environmentally expert executives. Finally, the positive impact of digital-green synergy transformation on ESG performance is weakened by the financing constraints, and the development of digital finance, green finance, and factor markets significantly strengthen this relationship. Our study contributes to the literature on digital-green synergy transformation and provide a reference for promoting high-quality economic development in China.