Corporate ESG Performance,Environmental Regulation And Green Innovation

The report of the 20 th Party Congress points out that "to promote green development,we should accelerate the green transformation of the development mode and actively and steadily promote carbon peaking and carbon neutral".As the main body of social and economic activities,green innovation of enterprises is an important way to realize the lowcarbon transformation of green economy.Green innovation is both the "green" concept of sustainable development and the "innovation" that leads the first driving force of development,which can maximize the synergistic benefits of economy and environment.However,green innovation is also characterized by large investment,long cycle time and high risk,which can aggravate the information asymmetry between enterprises and stakeholders.By practicing ESG concept,enterprises can effectively alleviate the information asymmetry problem and gather more resources for green innovation by conveying non-financial information on corporate environmental,social and governance performance to stakeholders.At the same time,the behavior of micro enterprises is inevitably influenced by macro policies.With the proposed strategy of building ecological civilization,the state gradually strengthens environmental regulation policies to promote the green transformation of enterprises.Under strict environmental regulations,can corporate ESG performance promote green innovation? Can environmental regulation play a moderating role in the relationship between the two? These questions need to be explored in depth.The 18 th Party Congress put forward the ecological civilization construction strategy and innovation-driven strategy,which pushed China’s environmental protection and sustainable development to a new height.Therefore,this paper takes 2012 as the starting point of the study and selects A-share listed companies from 2012-2021 to investigate whether corporate ESG performance will promote the improvement of green innovation,and further considers that corporate behavior will be profoundly influenced by the environmental regime to analyze the impact of environmental regulation on the relationship between the two.The study finds that(1)corporate ESG performance can significantly promote green innovation,and it can promote both substantive and strategic green innovation.(2)The moderating effect study finds that environmental regulation enhances the contribution of ESG performance to green innovation,substantive green innovation and strategic green innovation.(3)Heterogeneity analysis finds that the positive effect of corporate ESG performance on green innovation and the moderating effect of environmental regulation are more significant among firms in the central region,firms in heavy pollution industries,largescale firms and firms with rising ESG performance.(4)The mediating effect test finds that corporate ESG performance can influence green innovation by alleviating financing constraints,enhancing external monitoring pressure and aggregating human capital.This paper explores the non-financial effects of corporate ESG performance from the perspective of green innovation,and also studies the impact of corporate ESG performance on green innovation from the perspective of external environmental regulation,deepening the research on corporate ESG performance and green innovation.The following countermeasures are proposed: first,the government,as a policy maker,should guide enterprises to improve their ESG level,and at the same time,promote environmental regulation policies according to local conditions to facilitate enterprises’ proactive green innovation;second,enterprises,as policy undertakers,need to incorporate ESG management performance into their daily business objectives to promote green development;finally,investors,as capital investors,should apply ESG Finally,investors,as capital investors,should apply ESG concepts in their investments and guide the flow of capital to green industries.