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The Impact of ESG Performance on Green Innovation among Traditional Energy Enterprises—Evidence from Listed Companies in China

Author

Listed:
  • Meijia Ren

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Jinsheng Zhou

    (Key Laboratory of Mine Ecological Effects and Systematic Restoration, Ministry of Natural Resources, Beijing 100081, China)

  • Jingjian Si

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Guoyu Wang

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

  • Chunyu Guo

    (School of Economics and Management, China University of Geosciences, Beijing 100083, China)

Abstract

To address escalating environmental challenges and the energy crisis, traditional energy companies must initiate green transformations and enhance green innovation. ESG (Environmental, Social, and Governance) performance is vital for gauging enterprises’ sustainable development. Therefore, this study explores the relationship between the ESG performance of traditional energy companies and their extent of green innovation. It aims to investigate whether improving ESG performance can lead to enhanced green innovation within these companies. Therefore, this paper employs a fixed effect model to analyze the impact of ESG performance on green innovation among traditional energy companies, specifically focusing on those listed in the Chinese A-share market from 2013 to 2022. The results indicate that ESG performance significantly promotes green innovation within traditional energy companies. The mechanism test’s findings reveal that ESG performance impacts green innovation via three key pathways: innovation investment, external monitoring, and government subsidies. Furthermore, further analysis reveals that the intense market competition environment positively moderates the effect of ESG performance enhancement on the extent of green innovation. This implies that, by improving their ESG performance, traditional energy companies can enhance their green innovation and green transformation efforts. Moreover, this impact is particularly pronounced among state-owned enterprises.

Suggested Citation

  • Meijia Ren & Jinsheng Zhou & Jingjian Si & Guoyu Wang & Chunyu Guo, 2024. "The Impact of ESG Performance on Green Innovation among Traditional Energy Enterprises—Evidence from Listed Companies in China," Sustainability, MDPI, vol. 16(9), pages 1-16, April.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:9:p:3542-:d:1381553
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    Cited by:

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    2. Yang Zhang, 2025. "Does ESG Performance Affect Enterprise Innovation Performance? A Study on Governance and Resource Effects," SAGE Open, , vol. 15(3), pages 21582440251, July.
    3. Ali Ragab Ali & Kolawole Iyiola & Ahmad Alzubi, 2025. "Harnessing ESG Sustainability, Climate Policy Uncertainty and Information and Communication Technology for Energy Transition," Energies, MDPI, vol. 18(19), pages 1-24, October.
    4. Bao, Junsong & Yang, Liuyi, 2025. "Will ESG disclosure affect the green innovation level of SMEs?," Finance Research Letters, Elsevier, vol. 83(C).
    5. Uma Shankar Yadav & Indrajit Ghosal & Anupam Pareek & Kritika Khandelwal & Ajay Kumar yadav & Chandra Chakraborty, 2024. "Impact of entrepreneurial orientation and ESG on environmental performance: moderating impact of digital transformation and technological innovation as a mediating construct using Sobel test," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-41, December.
    6. Liu, Jiexian & Liang, Gaoyang, 2025. "Green finance, green governance performance, and the ESG performance: Evidence from a quasi-natural experiment," Finance Research Letters, Elsevier, vol. 84(C).
    7. Yan Ma & Pei Liu & Haonan Chen, 2024. "Corporate ESG Performance, Green Innovation, and Green New Quality Productivity: Evidence from China," Sustainability, MDPI, vol. 16(22), pages 1-21, November.

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