A Study of The Impact of Digital Transformation on ESG Development

In the face of global climate challenges, enterprises need to integrate digitalization and ESG strategies to promote green transformation and help achieve dual-carbon goals and sustainable development. This investigation examines the intricate relationship between ESG development and digital transformation, elucidating mechanisms about how digital changes affect ESG achievement, the heterogeneous, dynamic roles it plays in enterprises' ESG performance. It is found that transformation of digit has a significant impact on the level of corporate ESG accomplishment, but its effect is moderated by the external environment and corporate characteristics, showing heterogeneity. Furthermore, digital transformation has different effects on ESG performance. The study also points out that enhancing firms' dynamic capabilities serves as a distinct route and mechanism by which digital transformation exerts a leverage on the ESG performance, which indicates the level of environmental, social, and governance. The paper concludes by presenting the limitations of investigation in existence and the outlook of forthcoming research. It suggests that enterprises customize their strategies and that governments provide support to promote sustainable development jointly.