Impact of Green Transformation on Corporate Sustainable Development Performance in China

This study investigates how corporate green transformation (CGT) enhances corporate sustainable development performance (CSDP) and ensures their positive nexus and effective realization pathways. Using unbalanced panel data from 3,579 A-share companies listed on the Shanghai and Shenzhen Stock Exchanges between 2010 and 2022, the Word2Vec model is applied to measure CGT based on 8,061 green transformation keywords, and its mechanisms of influence on CSDP are explored. The findings show that CGT improves both corporate financial and environmental performance, exerting a significant positive effect on CSDP. Furthermore, CGT can foster corporate green innovation and strengthen the tone of management discussion and analysis (MD&A) reports. These improvements serve as pathways through which CGT promotes CSDP. Heterogeneity analysis confirms that the positive impact of CGT varies significantly depending on the level of CGT actions, the characteristics of heavily polluting firms, and different time periods.