Technology dividend or governance black box? Digital transformation and ESG performance in Chinese energy firms

Using 610 firm-year observations on 122 Chinese listed energy firms over 2020–2024, this paper examines the relationship between digital transformation and ESG performance, the mediating role of internal control quality and the moderating role of government subsidies. Digital transformation is positively associated with ESG performance in the controlled specification (coefficient 0.138, t = 2.32). Internal control quality carries a significant indirect effect of 0.035 (95% CI [0.008, 0.063]), while the direct effect becomes insignificant. Government subsidies strengthen the association (interaction coefficient 0.0452, t = 2.34). Industry analysis shows a stronger association in gas utilities than in power generation. The estimate becomes insignificant with firm fixed effects, and several alternative specifications are also insignificant; the findings therefore support a conditional association rather than a causal effect. The results highlight governance upgrading and the scale of public support as relevant considerations in energy-sector digitalisation.