ESG and green innovation: nonlinear moderation of public attention

Abstract This study investigates the impact of Environmental, Social, and Governance (ESG) on green innovation performance by analyzing data from China’s A-share listed firms in heavy-polluting industries between 2013 and 2022. We emphasize the moderating role of public attention in shaping the relationship between ESG and corporate green innovation. Key findings include: (1) ESG exhibits a robust positive effect on green innovation, with effect heterogeneity across firm characteristics. (2) Public attention demonstrates a significant inverted U-shaped moderating effect on the ESG–green innovation nexus, where moderate scrutiny enhances innovation but extreme scrutiny diminishes it. (3) Heterogeneity analysis reveals this moderating effect is more pronounced in non-state-owned enterprises, large firms, competitive markets, green patent-holding firms, capital-intensive industries, and growth-stage companies in highly marketized regions. These findings highlight public attention as a dual-edged monitoring mechanism, offering practical implications for fostering synergistic development between ESG adherence and green innovation among heavily polluting firms under “dual carbon goals”. This research also provides empirical insights for policymakers and businesses seeking to advance sustainable innovation in emerging economies.