Can ESG performance promote corporate green innovation in China? Micro evidence from innovation element-driven perspective

Purpose The purpose of this study is to examine the impact of environment, social and governance (ESG) performance on green innovation of Chinese listed companies from the innovation element-driven perspective, which is a new channel that is different from previous studies. Design/methodology/approach Using the data of Chinese A-share listed companies from 2014 to 2023, constructing a multivariate panel regression model to measure the relationship between ESG performance and corporate green innovation, especially exploring the mediating effects of R&D investment, financing constraints and human capital structure. Findings ESG performance can significantly enhance corporate green innovation. The innovation elements of R&D investment, financing constraints and human capital structure play a mediating role. ESG performance promotes corporate green innovation more powerful for non-state-owned enterprises, heavily polluting enterprises and eastern region enterprises. Practical implications The results inspire companies to integrate ESG concepts into management activities, encourage companies to increase R&D funding and talent investment, improve relationships with investors and the government and recruit more high-quality talents for reserving innovative resources. Originality/value Innovation element-driven perspective developed in this paper is a novel and reliable theoretical mechanism for revealing the impact of ESG performance on corporate green innovation. The driving path and conclusion are new to the literature.