From Responsibility to Renewal: How Does ESG Practice Promote Sustainable Business Model Innovation?

Based on panel data from Chinese A-share listed companies during 2014–2023 and employing text analysis to measure Sustainable Business Model Innovation (SBMI), this study investigates how corporate ESG performance promotes SBMI. The results reveal that firms with superior ESG ratings tend to exhibit stronger SBMI capabilities. Furthermore, patient capital and corporate reputation serve as partial mediators in this relationship, indicating that ESG indirectly promotes SBMI by attracting long-term-oriented capital and enhancing a firm’s reputation. Based on these observations, it is advised that the participation of green investors, the advancement of digital transformation, and the implementation of government innovation subsidies all significantly strengthen the positive impact of ESG on SBMI. Based on these findings, this paper recommends that (1) governments enhance innovation subsidy policies, (2) enterprises deepen the integration of ESG practices with digital transformation and actively attract green investors, and (3) green investors use financial tools to support the development of SBMI. These combined efforts can thereby jointly promote the sustainable transformation of enterprises.