Research on the impact of ESG scores on corporate substantive and strategic green innovation

This paper studies the impact of ESG scores on corporate substantive and strategic green innovation of Chinese listed companies between 2007 and 2022. Results show that ESG scores have a significant positive impact on the company's green innovation, substantive and strategic green innovation. In addition, ESG scores primarily influence firm's green innovation through three channels: R&D expenditure, R&D human capital, and information transparency. Furthermore, the positive influence of ESG scores on a company's green innovation is more significant when the company has a higher shareholding ratio of the largest shareholder and institutional investors, as well as when it is a state-owned enterprise. Further researches show that only E-scores significantly positively impact green innovation. Additionally, ESG scores have significant positive impact on green innovation with a lag of 1–3 years, but no significant impact from the fourth year onwards. The results offer scientific implications for listed companies to enhance their level of green innovation, both substantively and strategically.