Green Innovation and Financial Performance in Critical Mineral Mining: Evidence from a Multi-Country Institutional Perspective on the Just Energy Transition

The accelerating global energy transition has substantially increased demand for critical minerals such as copper, nickel, and lithium, positioning mining firms as key actors in the decarbonization of energy systems. However, the expansion of mineral extraction raises important sustainability challenges because mining activities remain highly energy- and carbon-intensive. This study investigates whether green innovation can simultaneously improve environmental performance and financial performance in critical mineral mining firms and examines the moderating role of institutional governance. Using a balanced panel of 35 publicly listed mining companies from Australia, Canada, Chile, Brazil, and Indonesia over the period 2015–2024, the analysis applies fixed-effects panel regressions complemented by dynamic specifications and multiple robustness tests, including alternative variable definitions and System Generalized Method of Moments (GMM) estimation. The results show that green innovation significantly reduces carbon intensity, indicating that environmental investments in renewable energy integration, electrification, and process efficiency contribute to improving emissions performance in mining operations. Green innovation also enhances firm financial performance, although the benefits emerge gradually over time, suggesting delayed financial gains followed by long-term efficiency improvements. Furthermore, governance quality strengthens the positive relationship between green innovation and firm performance, highlighting the importance of institutional environments in shaping the economic returns of sustainability strategies. By providing firm-level evidence across major mineral-producing economies, this study contributes to the literature on critical minerals, environmental finance, and the institutional dimensions of the just energy transition.