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Can ESG Disclosure Stimulate Corporations’ Sustainable Green Innovation Efforts? Evidence from China

Author

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  • Miao Li

    (Asia-Europe Institute, Universiti Malaya, Kuala Lumpur 50603, Malaysia)

  • Rajah Rasiah

    (Asia-Europe Institute, Universiti Malaya, Kuala Lumpur 50603, Malaysia)

Abstract

The Environmental, Social, and Governance (ESG) Composite Rating denotes corporations’ capability for supporting sustainable development activities, social responsibility, and transparent and ethical governance. It aims to inform investors and stakeholders about the company’s sustainability and social responsibility risks. ESG has increasingly become an informal yet significant driving force in promoting sustainable green innovation within the diversified co-governance environmental management system. This paper examines the dynamic relationship between ESG performance and sustainable green innovation practices in Chinese A-share listed companies from 2011 to 2022. The results show a positive correlation between ESG performance and the level of corporate sustainable green innovation. They also validate the moderating roles of informal external pressure and internal development demands. While the moderating effect of public environmental concern (PEC) is not significant, corporate digital transformation (CDT) significantly and positively moderates the relationship between ESG performance and sustainable green innovation. These findings offer policymakers and corporations a means to formulate a framework to shape the conduct of corporations to meet the market’s green development needs and to establish instruments that promote green innovation.

Suggested Citation

  • Miao Li & Rajah Rasiah, 2024. "Can ESG Disclosure Stimulate Corporations’ Sustainable Green Innovation Efforts? Evidence from China," Sustainability, MDPI, vol. 16(21), pages 1-20, October.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:21:p:9390-:d:1509192
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    References listed on IDEAS

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    Cited by:

    1. Danni Wang & Tingwei Wang, 2025. "Does ESG Information Disclosure Improve Green Innovation in Manufacturing Enterprises?," Sustainability, MDPI, vol. 17(6), pages 1-17, March.
    2. Nadia Bushra Mohammed Ali & Hiba Awad Alla Ali Hussin & Howaida Mohammed Fadol Mohammed & Khaled Abd Alaziz Hassan Mohmmed & Amjad Abdullah S. Almutiri & Mohamed Ali Ali, 2025. "The Effect of Environmental, Social, and Governance (ESG) Disclosure on the Profitability of Saudi-Listed Firms: Insights from Saudi Vision 2030," Sustainability, MDPI, vol. 17(7), pages 1-25, March.
    3. Li Liu & Wenxiu Hu & Fangyun Wang & Li Yang, 2025. "Making Sustained Green Innovation in Firms Happen: The Role of CEO Openness," Sustainability, MDPI, vol. 17(11), pages 1-24, June.
    4. Iman Babiker & Mashael Bakhit & Aida Osman Abdalla Bilal & Ayman Abdalla Mohammed Abubakr & Abubkr Ahmed Elhadi Abdelraheem, 2025. "The Effect of Female Representation on Boards on Environmental, Social, and Governance Disclosure: Empirical Evidence from Saudi Highly Polluting Industries," Sustainability, MDPI, vol. 17(6), pages 1-28, March.
    5. Arun Podayan & B Charumathi, 2025. "Corporate social capital disclosure in integrated reports: a structural topic modelling approach," Future Business Journal, Springer, vol. 11(1), pages 1-31, December.

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