Shifting focus from end-of-pipe treatment to source control: ESG ratings' impact on corporate green innovation.

This study actively explores the pivotal role of environment, society, and governance (ESG) ratings in optimizing corporate green innovation activities as a robust response to ongoing ESG investment divestment. It provides empirical support for implementing corporate green transitions, establishing, and refining market-driven green development framework, and attaining "carbon peaking, carbon neutrality" targets. Furthermore, the research represents a groundbreaking effort to assess the influence of ESG ratings on corporate green innovation with a specific focus on pollution disposal. Specifically, examining data from Chinese A-share listed companies spanning 2011 to 2020, this study utilizes various models, including multi-period difference-in-differences (DID), event study, staggered DID, and synthetic DID (SDID). The ensuing analysis reveals that ESG ratings significantly impact the development of corporate green innovation, catalyzing the transformation of green innovation activities from end-of-pipe to source control. Notably, ESG ratings achieve this transformation by mitigating managerial myopia, enhancing the research and development (R&D) staff ratio, and alleviating financial constraints. However, the study also identifies institutional constraints and corporate digitalization as factors leading to heterogeneous effects on green innovation and its direction. These findings not only provide enhanced theoretical support but also offer empirical validation for corporations and governments looking to implement and generalize ESG ratings, facilitating a successful green transition.

• Publication year

  2024

• Venue

  Journal of Environmental Management

• Publication date

  2024-02-23

• Fields of study

  Medicine, Business, Environmental Science

• Identifiers
  DOI 10.1016/j.jenvman.2024.120409PMID 38401500
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar, PubMed

• No claims are published for this paper.

• No concepts are published for this paper.

• China’s Environmental Protection Tax and Green Innovation: Incentive Effect or Crowding-out Effect

  2026cited by this paper
• Towards sustainable development: How does ESG performance promotes corporate green transformation

  2024cited by this paper
• Do ESG ratings promote corporate green innovation? A quasi-natural experiment based on SynTao green Finance's ESG ratings

  2023cited by this paper
• Does genetic diversity on corporate boards lead to improved environmental performance?

  2023cited by this paper
• Firms' digitalization in manufacturing and the structure and direction of green innovation.

  2023cited by this paper
• ESG performance and corporate risk-taking: Evidence from China

  2023cited by this paper
• ESG and firm performance: The role of size and media channels

  2023cited by this paper
• Subsidy expiration and greenwashing decision: Is there a role of bankruptcy risk?

  2023cited by this paper
• ESG Rating Events, Financial Investment Behavior and Corporate Innovation

  2023cited by this paper
• More sustainable, more productive: Evidence from ESG ratings and total factor productivity among listed Chinese firms

  2023cited by this paper
• ESG in China: A review of practice and research, and future research avenues

  2023cited by this paper
• Curse to blessing: The carbon emissions trading system and resource-based cities' carbon mitigation

  2023cited by this paper
• Can ESG ratings mitigate managerial myopia? Evidence from Chinese listed companies

  2023cited by this paper
• The potential of responsible business to promote sustainable work – An analysis of CSR/ESG instruments

  2023cited by this paper
• Sustainability and stability: Will ESG investment reduce the return and volatility spillover effects across the Chinese financial market?

  2023cited by this paper
• How does investor attention affect energy firms' managerial opportunistic behavior? New evidence from China

  2023cited by this paper
• Technological knowledge coupling and green innovation in manufacturing firms: Moderating roles of mimetic pressure and environmental identity

  2022cited by this paper
• Twitter Sentiment Analysis and Expert Ratings of Initial Coin Offering Fundraising: Evidence from Australia and Singapore Markets

  2022cited by this paper
• Composite fiscal decentralisation and green innovation: Imperative strategy for institutional reforms and sustainable development in OECD countries

  2022cited by this paper
• Media spotlight, corporate sustainability and the cost of debt

  2022cited by this paper
• ESG and Firm's Default Risk

  2022cited by this paper
• The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness

  2022cited by this paper
• Green Technology Innovation Spillover Effect and Urban Eco-Efficiency Convergence: Evidence from Chinese Cities

  2022cited by this paper
• What’s trending in difference-in-differences? A synthesis of the recent econometrics literature

  2022cited by this paper
• Social Trust and Female Board Representation: Evidence from China

  2022cited by this paper
• Can enterprise digitization improve ESG performance?

  2022cited by this paper
• Can ESG certification help company get out of over-indebtedness? Evidence from China

  2022cited by this paper
• The development of research on environmental, social, and governance (ESG): A bibliometric analysis

  2022cited by this paper
• Effect of ESG performance on the cost of equity capital: Evidence from China

  2022cited by this paper
• The added value and differentiation among ESG investment strategies in stock markets

  2022cited by this paper
• The Past, Present, and Future of China-Related Accounting Research

  2022cited by this paper
• Does Corporate ESG Create Value? New Evidence from M&As in China

  2022cited by this paper
• Does environmental, social, and governance performance move together with corporate green innovation in China?

  2022cited by this paper
• Improving high-quality development with environmental regulation and industrial structure in China

  2022cited by this paper
• Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings

  2022cited by this paper
• Heterogeneous two-sided effects of different types of environmental regulations on carbon productivity in China.

  2022cited by this paper
• Does better environmental, social, and governance induce better corporate green innovation: The mediating role of financing constraints

  2022cited by this paper
• Political connections and green innovation: The role of a corporate entrepreneurship strategy in state-owned enterprises

  2022cited by this paper
• A review of China-related accounting research in the past 25 years

  2022cited by this paper
• ICT diffusion, financial development, and economic growth: An international cross-country analysis

  2021cited by this paper
• The impact of social executives on firms’ mergers and acquisitions strategies: A difference-in-differences analysis

  2021cited by this paper
• ESG activities and banking performance: International evidence from emerging economies

  2021cited by this paper
• Stock Market Liberalization and Corporate Green Innovation: Evidence from China

  2021cited by this paper
• Green lies and their effect on intention to invest

  2021cited by this paper
• Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China

  2021cited by this paper
• An empirical analysis of the household consumption-induced carbon emissions in China

  2021cited by this paper
• Understanding the Impact of ESG Practices in Corporate Finance

  2021cited by this paper
• How Much Should We Trust Staggered Difference-In-Differences Estimates?

  2021cited by this paper
• Varieties in state capitalism and corporate innovation: Evidence from an emerging economy

  2021cited by this paper
• Social responsibility portfolio optimization incorporating ESG criteria

  2021cited by this paper
• Demand for green finance: Resolving financing constraints on green innovation in China

  2021cited by this paper
• ESG Importance for Long-Term Shareholder Value Creation: Literature vs. Practice

  2021cited by this paper
• Could environmental regulation promote the technological innovation of China's emerging marine enterprises? Based on the moderating effect of government grants.

  2021cited by this paper
• Public environmental concern, CEO turnover, and green investment: Evidence from a quasi-natural experiment in China

  2021cited by this paper
• ESG Disclosure and Idiosyncratic Risk in Initial Public Offerings

  2021cited by this paper
• State ownership and green innovation in China: The contingent roles of environmental and organizational factors

  2021cited by this paper
• Does it pay for new firms to be green? An empirical analysis of when and how different greening strategies affect the performance of new firms

  2021cited by this paper
• Does carbon risk matter for corporate acquisition decisions

  2021cited by this paper
• Integrating corporate social responsibility criteria into executive compensation and firm innovation: International evidence

  2021cited by this paper
• Competition and ESG practices in emerging markets: Evidence from a difference-in-differences model

  2021cited by this paper
• How does green technology innovation affect urbanization? An empirical study from provinces of China

  2021cited by this paper
• Do ESG strategies enhance bank stability during financial turmoil? Evidence from Europe

  2021cited by this paper
• The value of a firm’s engagement in ESG practices: Are we looking at the right side?

  2021cited by this paper
• Environmental, social and governance factors and assessing firm value: valuation, signalling and stakeholder perspectives

  2021cited by this paper
• CEO Foreign Experience and Green Innovation: Evidence from China

  2021cited by this paper
• ESG rating and stock price crash risk: Evidence from China

  2021cited by this paper
• Stock market reactions to adverse ESG disclosure via media channels

  2021cited by this paper
• Green Supply Chain Management practices and impact on firm performance: The moderating effect of collaborative capability

  2021cited by this paper
• Factors Affecting ESG towards Impact on Investment: A Structural Approach

  2021cited by this paper
• Is corporate social responsibility value relevant? Evidence from a quasi-natural experiment of anti-corruption campaign

  2021cited by this paper
• Green credit policy, government behavior and green innovation quality of enterprises

  2021cited by this paper
• Does the severity of a client’s negative environmental, social and governance reputation affect audit effort and audit quality?

  2020cited by this paper
• Influence of Ambidextrous Learning on Eco-Innovation Performance of Startups: Moderating Effect of Top Management’s Environmental Awareness

  2020cited by this paper
• Can environmental regulation promote urban green innovation Efficiency? An empirical study based on Chinese cities

  2020cited by this paper
• What factors determine the survival of green innovative enterprises in China? -- A method based on fsQCA

  2020cited by this paper
• The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China

  2020cited by this paper
• Eco-innovation and energy productivity: New determinants of renewable energy consumption.

  2020cited by this paper
• Financial distress, internal control, and earnings management: Evidence from China

  2020cited by this paper
• Understanding the impact of symbolic and substantive environmental actions on organizational reputation

  2020cited by this paper
• The Big Three and corporate carbon emissions around the world

  2020cited by this paper
• Does corporate social responsibility create shareholder value? The importance of long-term investors

  2020cited by this paper
• The Value of Employee Satisfaction in Disastrous Times: Evidence from COVID-19

  2020cited by this paper
• A Dual-Agency Model of Firm CSR in Response to Institutional Pressure: Evidence from Chinese Publicly Listed Firms

  2020cited by this paper
• ESG Preferences, Risk and Return

  2020cited by this paper
• Heterogeneous impacts of environmental regulations and foreign direct investment on green innovation across different regions in China.

  2020cited by this paper
• Do chief sustainability officers and CSR committees influence CSR-related outcomes? A structured literature review based on empirical-quantitative research findings

  2020cited by this paper
• Do renewable energy technology innovations promote China's green productivity growth? Fresh evidence from partially linear functional-coefficient models

  2020cited by this paper
• Wage distortion and green technological progress: A directed technological progress perspective

  2020cited by this paper
• Investment and Asset Pricing with ESG Disagreement

  2020cited by this paper
• Quantity or quality? The impacts of environmental regulation on firms’ innovation–Quasi-natural experiment based on China's carbon emissions trading pilot

  2020cited by this paper
• The color of shareholders' money: Institutional shareholders' political values and corporate environmental disclosure

  2020cited by this paper
• Earnings management in local governments: the role of political factors

  2019cited by this paper
• Pre-Event Trends in the Panel Event-Study Design

  2019cited by this paper
• ESG performance and market value: the moderating role of employee board representation

  2019cited by this paper
• Environmental regulation and green productivity growth: Empirical evidence on the Porter Hypothesis from OECD industrial sectors

  2019cited by this paper
• Short-term management earnings forecasts and earnings management through real activities manipulation

  2019cited by this paper
• Do green technology innovations contribute to carbon dioxide emission reduction? Empirical evidence from patent data

  2019cited by this paper
• Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence

  2019cited by this paper
• Towards a green world: How do green technology in-novations affect total-factor carbon productivity

  2019cited by this paper
• Loaning scale and government subsidy for promoting green innovation

  2019cited by this paper

• Not all voices are equal: stakeholder environmental pressures and corporate green innovation strategies

  2026cites this paper
• How environmental regulation affects enterprise pollution and carbon reduction: A comprehensive production process perspective

  2026cites this paper
• The Blessing of Green Label: Investigating the Role of Green Manufacturing Certification in Corporate Green Transformation

  2026cites this paper
• Do large companies have better environmental performance? Evidence from Chinese listed companies

  2026influential citation
• Gaining a deeper understanding of the impact of ESG performance on stock liquidity: Evidence from China

  2026cites this paper
• From Control to Incentive: How Market-Driven Environmental Regulation Shapes ESG Performance in Manufacturing Industries

  2025cites this paper
• Climate risk, environmental supervision, and corporate green innovation

  2025cites this paper
• Tren Green Investment selama Satu Dekade: Analisis Bibliometrik

  2025cites this paper
• Unpacking Circular Economy Practices and Carbon Emissions Relationships: Co‐benefits and Legitimacy Perspectives

  2025cites this paper
• Can ESG ratings drive innovation in sports businesses? An empirical study of A-share listed sports companies

  2025cites this paper
• Government-initiated environmental credit rating and corporate climate transition risk exposure

  2025cites this paper
• ESG Rating and Corporate Motivation for Green Technology Innovation: New Insights From Multidimensional External Attention

  2025cites this paper
• The Beacon of Sustainability: How Do ESG Ratings Improve Corporate Sustainable Development Performance?

  2025cites this paper
• How does reverse mixed reform affect green innovation of private enterprises?

  2025cites this paper
• The Impact of ESG Ratings on Corporate Overseas Performance: A Quasi-experiment Based on a Staggered DID Model

  2025cites this paper
• Corporate Management of Environmental, Social, and Governance Ratings and Rating Divergence

  2025cites this paper
• Do Green Funds Reduce Corporate Green Innovation Bubbles: The Role of Green Finance Policy

  2025cites this paper
• Quantity or quality? The impact assessment of environmental regulation on green innovation

  2025cites this paper
• Crafting the perfect policy combination: Exploring the synergistic effects of dual-pilot energy policies on urban carbon emission efficiency

  2025cites this paper
• Innovation in shouldering green responsibility: ESG performance and green technology innovation

  2025cites this paper
• Digital transformation and the spillover of green innovation: evidence from peer firms in heavily polluting industries

  2025cites this paper
• Does ESG Performance Enhance Corporate Green Technological Innovation? Micro Evidence from Chinese-Listed Companies

  2025cites this paper
• Adoption of environmentally friendly urban freight logistics practices: the role of communication and governance

  2025cites this paper
• Employment Challenges and Employment Structure Adjustment of Low-Carbon City Pilot Policies: Evidence from Chinese Enterprises

  2025cites this paper
• Do Analysts Matter for Green Investment? Evidence from the EU Taxonomy

  2025cites this paper
• Research on the Impact of Supply Chain ESG on Enterprises’ Green Innovation Performance

  2025cites this paper
• Synergetic mitigation of air pollution and carbon emissions of coal-based energy: A review and recommendations for technology assessment, scenario analysis, and pathway planning

  2025cites this paper
• Green Disclosure Regulation: How Far has been Researched?

  2025cites this paper
• Climate policy uncertainty, corporate ESG performance and technological innovation: evidence from China

  2025cites this paper
• Joint spousal ownership and corporate green innovation: Empirical evidence from family businesses listed on China's A-shares market

  2025cites this paper
• Industry-Level Climate Policy Risk Exposure and Corporate ESG Performance

  2025cites this paper
• Regional Research on Ecological Environment in China: A Literature Review

  2025cites this paper
• Research on the impact of the ESG rating divergence of manufacturing firms on carbon emission intensity

  2025cites this paper
• Knowledge-driven green cognition: the impact of enterprise innovation in sustainable development performance

  2025cites this paper
• Institutional openness and firm’s green innovation: evidence from a quasi-natural experiment in China

  2025cites this paper
• Policy-driven ESG mandates for immediate financial performance and long-term Innovation: Synergistic insights from Chinese enterprises

  2025cites this paper
• The Role of ESG in Driving Sustainable Innovation in Water Sector: From Gaps to Governance

  2025cites this paper
• The effect of issuing green bonds on peer companies’ green innovation: evidence from Chinese listed companies

  2025cites this paper
• ESG performance and green innovation of Chinese enterprises: Based on the perspective of financing constraints.

  2024cites this paper
• Can ESG Disclosure Stimulate Corporations’ Sustainable Green Innovation Efforts? Evidence from China

  2024cites this paper
• Can ESG ratings drive digital innovation in enterprises? Exploring Porter's hypothesis in the digital era

  2024cites this paper
• Manufacturing enterprises move towards sustainable development: ESG performance, market-based environmental regulation, and green technological innovation.

  2024cites this paper
• The path toward urban carbon neutrality: How does the low-carbon city pilot policy stimulate low-carbon technology?

  2024cites this paper
• Study on the influence degree of marine ranching on the high-quality development of coastal cities

  2024cites this paper
• Does the limelight foster the green transition of listed industrial companies? An empirical analysis from Chinese A-share market

  2024cites this paper
• Photocatalysis toward Microplastics Conversion: A Critical Review

  2024cites this paper
• ESG Ratings as a Strategic Imperative: Unraveling Their Influence on Corporate Financial Performance in China

  2024cites this paper
• The impact of ESG ratings on the quality and quantity of green innovation of new energy enterprises

  2024cites this paper
• American Journal of Business Science Philosophy The Value of Sustainability: How Environmental, Social, and Governance Cost Investments Impact Corporate Financial Performance

  year unknowncites this paper