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The Impact of Digital Transformation on ESG: A Case Study of Chinese-Listed Companies

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  • Yan Peng

    (School of Business, Hunan Institute of Technology, Hengyang 421002, China
    School of Land and Tourism, Luoyang Normal University, Luoyang 471934, China)

  • Hanzi Chen

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

  • Tinghui Li

    (School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China)

Abstract

Enterprise digital transformation involves leveraging digital technologies to optimize and improve business operations. Not only does it augment operational efficiency, but it also establishes favorable conditions for bolstering ESG. To investigate the impact of digital transformation on ESG performance, this study employs a fixed effects model. The analysis utilizes data from a sample of 1422 publicly listed companies in China, spanning the period of 2012 to 2021. This paper further explores the mechanism and heterogeneity behind this impact. The research findings indicate that digital transformation has a positive impact on the ESG performance of companies. It remains robust even after conducting robustness tests, which include omitted variable and endogeneity tests. Furthermore, the study identifies variations in the influence of digital transformation on different dimensions of ESG performance. Through a mechanism analysis, it is revealed that digital transformation positively affects ESG performance by optimizing the structure of human capital, enhancing operational efficiency, and promoting green innovation. Additionally, heterogeneity analysis indicates that the positive effect of digital transformation on ESG performance is particularly significant in capital-intensive industries, high-tech companies, and companies with low carbon emissions.

Suggested Citation

  • Yan Peng & Hanzi Chen & Tinghui Li, 2023. "The Impact of Digital Transformation on ESG: A Case Study of Chinese-Listed Companies," Sustainability, MDPI, vol. 15(20), pages 1-21, October.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:20:p:15072-:d:1263358
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    2. Caiming Nie & Dor Kushinsky & Ting Ren, 2025. "Digital Transformation, CEO Compensation, and ESG Performance: Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 17(9), pages 1-23, April.
    3. George Sklavos & George Theodossiou & Zacharias Papanikolaou & Christos Karelakis & Konstantina Ragazou, 2024. "Environmental, Social, and Governance-Based Artificial Intelligence Governance: Digitalizing Firms’ Leadership and Human Resources Management," Sustainability, MDPI, vol. 16(16), pages 1-20, August.
    4. Eduard Madalin Dinu & Cecilia Nicoleta Jurcut & Delia Anca Gabriela Gligor & Irina Daniela Cismasu & Alexandru Buglea, 2025. "Integrating Digital Technologies to Enhance ESG Performance: A Focus on Central and Eastern European Countries," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 27(70), pages 903-903, August.
    5. Xu, Jian & Yin, Jian, 2025. "Digital transformation and ESG performance: The chain mediating role of technological innovation and financing constraints," Finance Research Letters, Elsevier, vol. 71(C).
    6. Xiongtian Shi & Yan Liu & Zhengyong Yu, 2024. "Unveiling the Catalytic Role of Digital Trade in China’s Carbon Emission Reduction under the Dual Carbon Policy," Sustainability, MDPI, vol. 16(12), pages 1-25, June.

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