Study on the Impact of Corporate ESG Performance on Green Innovation Performance—Evidence from Listed Companies in China A-Shares

Abstract

With the establishment of China’s “dual carbon” target and the promotion of high-quality development strategy, the role of green innovation has become increasingly important. Corporate ESG innovation, as a guiding principle for companies to practice sustainable development and an important signal for evaluating their environmental and social responsibilities as well as corporate governance level, deserves in-depth research on its impact on green innovation performance. This paper empirically analyzes the green innovation effect of corporate ESG (Environmental, Social and Governance) performance using Chinese A-share listed companies as a sample from 2009 to 2021. The research shows that corporate ESG performance can enhance green innovation performance. Mechanism analysis reveals that ESG performance mainly improves green innovation performance by alleviating financing constraints and enhancing human capital. Further research shows that all three sub-dimensions of ESG performance contribute to improving green innovation performance, with the strongest effect observed in corporate governance performance. ESG performance not only enhances strategic green innovation performance and independent green innovation performance but also improves substantial green innovation performance and collaborative green innovation performance. Therefore, the government should improve the ESG information disclosure system, increase support for companies with excellent ESG performance, and improve local talent policies to attract high-quality green innovation talents. Investors should incorporate ESG performance into their decision-making and strengthen the identification and use of ESG information. Companies should formulate ESG strategies, increase relevant investments, prioritize corporate governance improvement, and enhance the quality of ESG information disclosure through various means.