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Can ESG Ratings Stimulate Corporate Green Innovation? Evidence from China

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  • Heying Liu

    (School of Business, Macau University of Science and Technology, Macao 999078, China)

  • Chan Lyu

    (School of Business, Macau University of Science and Technology, Macao 999078, China)

Abstract

Green innovation serves as both a catalyst for businesses to pursue sustainable development and a crucial step in achieving green circular economic development. Green innovation is the practice of organizations considering environmental, social, and governance (ESG) aspects and the ESG advantages resulting from this process may become a driving force for enterprises to undergo a green transformation. Therefore, based on data related to Chinese A-share listed companies from 2009 to 2020, we study the relationship between ESG rating performance and corporate green innovation and its boundary mechanism. The results show that ESG ratings can improve the green innovation level of listed enterprises, and the relationship between ESG ratings and green innovation was also found to be strengthened by the institutional environment and redundant organizational resources. This study previously confirmed the positive impact of enterprises’ ESG ratings on their green innovation, which has important implications for realizing the effective combination of ESG advantages and green innovation, promoting the construction of an ecological civilization, and realizing the concept of a community with a shared future for mankind.

Suggested Citation

  • Heying Liu & Chan Lyu, 2022. "Can ESG Ratings Stimulate Corporate Green Innovation? Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-20, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:19:p:12516-:d:930802
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    Cited by:

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    3. Qin, Meng & Zhang, Xiaojing & Li, Yameng & Badarcea, Roxana Maria, 2023. "Blockchain market and green finance: The enablers of carbon neutrality in China," Energy Economics, Elsevier, vol. 118(C).
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    6. Shusen Zhu & Hui Sun & Beibei Zhang & Zedong Yang & Xuechao Xia, 2023. "Bilateral Effects of ESG Responsibility Fulfillment of Industrial Companies on Green Innovation," Sustainability, MDPI, vol. 15(13), pages 1-20, June.
    7. Inova Fitri Siregar & Tubagus Ismail & Muhammad Taqi & Nurhayati Soleha, 2024. "Influence of ESG on Sustainability Reporting: Mediation Rule of Green Innovation and Investor Sentiment," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 452-463, January.
    8. Jackson Juatco Tan & Virginia Ramirez Arceo, 2024. "Women driving Philippine entrepreneurship: Social and governance issues as mediated by economic development," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 14(1), pages 1-13, December.
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    11. Xiyan Gu & Yingjun Zhu & Jingxia Zhang, 2023. "Toward sustainable port development: an empirical analysis of China’s port industry using an ESG framework," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.

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