IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v42y2026i2p473-485.html

ESG Decoupling and Innovation: Are China's Agri‐Food Companies Walking the Walk?

Author

Listed:
  • Yanyan Zhang
  • Tao Xiong

Abstract

Promoting sustainable, innovation‐driven growth is crucial for achieving high‐quality economic development in the new era. As a key indicator of companies' sustainability, ESG practices have gained significant attention. However, the lack of a unified ESG evaluation framework and standardized disclosure regulations has led some companies to exaggerate or misrepresent their ESG performance—an issue known as “ESG decoupling.” This study examines the impact of ESG decoupling on agri‐food companies' innovation, using panel data from 2011 to 2022. The results show that ESG decoupling undermines a company's credibility, hindering innovation. However, independent directors mitigate the negative effects of ESG decoupling on innovation. Further analysis reveals that the impact of ESG decoupling is less severe in companies with low digital transformation levels and state‐owned enterprises (SOEs). In contrast, the negative effects are more significant in large companies and the food industry. These findings contribute to a deeper understanding of the relationship between ESG decoupling and innovation. It offers empirical evidence and expands the theoretical framework linking ESG behavior with innovation. Ultimately, the study highlights the need for improved ESG disclosure systems and enhanced companies' credibility to foster a more innovation‐friendly environment.

Suggested Citation

  • Yanyan Zhang & Tao Xiong, 2026. "ESG Decoupling and Innovation: Are China's Agri‐Food Companies Walking the Walk?," Agribusiness, John Wiley & Sons, Ltd., vol. 42(2), pages 473-485, April.
    • Handle: RePEc:wly:agribz:v:42:y:2026:i:2:p:473-485
    DOI: 10.1002/agr.22059
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.22059
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.22059?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Qiang Qiu & Jinyue Yu, 2023. "Impact of independent director network on corporate green innovation: Evidence from Chinese listed companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3271-3293, November.
    2. Zhang, Dongyang, 2023. "Can digital finance empowerment reduce extreme ESG hypocrisy resistance to improve green innovation?," Energy Economics, Elsevier, vol. 125(C).
    3. Yihan Wu & Bin Dong, 2021. "Independent director network and corporate innovation: evidence from a natural experiment in China," Applied Economics Letters, Taylor & Francis Journals, vol. 28(7), pages 559-564, April.
    4. Helmers, Christian & Patnam, Manasa & Rau, P. Raghavendra, 2017. "Do board interlocks increase innovation? Evidence from a corporate governance reform in India," Journal of Banking & Finance, Elsevier, vol. 80(C), pages 51-70.
    5. Sabrina Scheidler & Laura Marie Edinger-Schons & Jelena Spanjol & Jan Wieseke, 2019. "Scrooge Posing as Mother Teresa: How Hypocritical Social Responsibility Strategies Hurt Employees and Firms," Journal of Business Ethics, Springer, vol. 157(2), pages 339-358, June.
    6. Chen, Lu & Ma, Yan & Feng, Gen-Fu & Chang, Chun-Ping, 2024. "Does environmental governance mitigate the detriment of greenwashing on innovation in China?," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    7. Peter Tashman & Valentina Marano & Tatiana Kostova, 2019. "Walking the walk or talking the talk? Corporate social responsibility decoupling in emerging market multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(2), pages 153-171, March.
    8. Christopher Marquis & Cuili Qian, 2014. "Corporate Social Responsibility Reporting in China: Symbol or Substance?," Organization Science, INFORMS, vol. 25(1), pages 127-148, February.
    9. Francis, Jennifer & Smith, Abbie, 1995. "Agency costs and innovation some empirical evidence," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 383-409, April.
    10. Chaohui Xu & Yingjie Xu, 2023. "Exploring the effects of director network on open innovation: the moderating role of CEO short-sightedness," European Journal of Innovation Management, Emerald Group Publishing Limited, vol. 27(8), pages 2545-2574, April.
    11. Li, Menghan & Chen, Qi, 2024. "Executive pay gap and corporate ESG greenwashing: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jalal Khan & Wu Fengyun & Arshad Fawad, 2025. "Corporate environmentalism and value creation: Investigating the role of shared independent directors in green technology adoption and financial performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(1), pages 118-137, January.
    2. Huisu Lai & Lei Quan & Fei Wu & Song Tang & Chong Guo & Xiaobing Lai, 2025. "Corporate environmental publicity and green innovation: are words consistent with actions?," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.
    3. Patrick Velte, 2023. "Determinants and consequences of corporate social responsibility decoupling—Status quo and limitations of recent empirical quantitative research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 2695-2717, November.
    4. Sneideriene, Agne & Legenzova, Renata, 2025. "Greenwashing prevention in environmental, social, and governance (ESG) disclosures: A bibliometric analysis," Research in International Business and Finance, Elsevier, vol. 74(C).
    5. Rekha Rao-Nicholson & Htwe Htwe Thein & Yifan Zhong, 2024. "A thematic analysis of the links between multinational enterprises’ corporate social responsibility and the Sustainable Development Goals in Myanmar," Journal of International Business Policy, Palgrave Macmillan, vol. 7(2), pages 203-223, June.
    6. Dayuan Li & Jialin Jiang & Lu Zhang & Chen Huang & Ding Wang, 2023. "Do CEOs with Sent-Down Movement Experience Foster Corporate Environmental Responsibility?," Journal of Business Ethics, Springer, vol. 185(1), pages 147-168, June.
    7. Mou, Saiya & Wang, Xinquan & Hu, Feng, 2025. "Does privatization hurt ESG? The role of state-owned imprinting," Energy Economics, Elsevier, vol. 151(C).
    8. Jinyu Chen & Yan Yang & Qian Ding & Julan Xie, 2025. "Top Management Team Connectedness and Greenwashing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 3725-3743, October.
    9. Zhang, Sihan & Chen, Zhibin, 2025. "Experts on the board: How do IT-savvy directors promote corporate digital innovation?," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 791-817.
    10. Kewen Wang & Yongqi Yu & Xin Wang & Haidong Zheng, 2024. "Walk your reputation: The impact of corporate social responsibility decoupling on the hospitality and tourism firm value in the time of crisis," Tourism Economics, , vol. 30(6), pages 1580-1599, September.
    11. Jieyu Ren & Peng Wu & Liya Hou, 2024. "Social media attention and corporate greenwashing: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(6), pages 5446-5465, November.
    12. Federica Nieri & Luciano Ciravegna & Ruth V. Aguilera & Elisa Giuliani, 2019. "Larger, more internationalized, better behaved? A configurational study of em erging market multinational enterprises' involvement in corporate wrongdoing," Discussion Papers 2019/255, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    13. Na Yang & Jue Wang & Xiaming Liu & Lingyun Huang, 2022. "Home-country institutions and corporate social responsibility of emerging economy multinational enterprises: The belt and road initiative as an example," Asia Pacific Journal of Management, Springer, vol. 39(3), pages 927-965, September.
    14. Yihao Guo & Yanwen Song & Yimin Wang, 2024. "Happy troubles? CSR awards and CSR report quality," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2989-3005, July.
    15. Sarah Kaplan, 2023. "The Promises and Perils of Corporate Purpose," Strategy Science, INFORMS, vol. 8(2), pages 288-301, June.
    16. repec:hal:journl:hal-04699553 is not listed on IDEAS
    17. Rong Ma & Rakesh B. Sambharya, 2024. "International diversification and corporate social responsibility disclosure quality: Employee versus environmental dimensions," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4248-4264, September.
    18. Ruxi Wang & Yihui Xiao & Chunling Zhu & Yuwei Qi, 2025. "Is obedience rewarding? State investment in response to CSR reporting in China," Asia Pacific Journal of Management, Springer, vol. 42(3), pages 1303-1343, September.
    19. Garanina, Tatiana & Kim, Oksana, 2023. "The relationship between CSR disclosure and accounting conservatism: The role of state ownership," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 50(C).
    20. Zhang, Yuting & Chin, Tachia & Al-Wazer, Ragwa, 2025. "Good neighbors but bad employers? How corporate digital transformation affects incongruence between external and internal corporate social responsibility," Technological Forecasting and Social Change, Elsevier, vol. 210(C).
    21. Ding Wang & Jiang Wei & Niels Noorderhaven & Yang Liu, 2023. "Signaling Effects of CSR Performance on Cross-border Alliance Formation," Journal of Business Ethics, Springer, vol. 186(4), pages 831-850, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:42:y:2026:i:2:p:473-485. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.