Corporate ESG Performance and Low-Carbon Technology Innovation: Mechanism Analysis and Heterogeneity Tests

ESG (Environmental, Social, and Governance) performance is increasingly viewed as a strategic factor shaping firms’ innovation activities. However, existing studies have largely examined green innovation as a whole, with limited attention to low-carbon technological innovation as a distinct domain and insufficient understanding of its driving mechanisms and conditional heterogeneity. Using panel data on Chinese A-share listed companies from 2009 to 2024, this study employs a two-way fixed-effects framework to examine the effect of ESG performance on low-carbon technological innovation, and further investigates the underlying transmission mechanisms and heterogeneous effects. The results show that ESG significantly promotes low-carbon technological innovation, with a notably stronger effect on substantive innovation than on strategic innovation, indicating that ESG drives genuine technological advancement rather than superficial patent accumulation. Mechanism tests reveal that ESG facilitates innovation by easing financing constraints and enhancing government support. At the dimensional level, the environmental and social pillars exert significant positive effects, whereas the governance pillar does not. Heterogeneity analyses demonstrate that the promotional effect is more pronounced in state-owned enterprises, large firms, heavily polluting industries, and non-technology-intensive firms, revealing structural variation across firm characteristics. By isolating low-carbon innovation from the broader green innovation concept and identifying dual transmission channels, this study extends the literature on the economic consequences of ESG and provides evidence for designing differentiated green governance policies.