Corporate digital transformation, as a critical driver of high-quality economic and social development, has exerted an increasingly significant influence on operational efficiency, innovation vitality, and environmental, social, and governance (ESG) performance. A deeper investigation into the mechanisms through which corporate digital transformation influences ESG performance carries substantial theoretical value and practical implications. Based on annual report texts of A-share listed companies in Shanghai and Shenzhen between 2010 and 2023, this study employs a digital transformation performance index derived from large language models and an implementation intensity index constructed from digital patents, thereby enabling a precise assessment of firms’ overall digital transformation. The findings reveal that corporate digital transformation significantly enhances ESG performance, and this conclusion remains robust after addressing endogeneity concerns and conducting extensive robustness checks. Mechanism analysis indicates that digital transformation fosters ESG performance by increasing research and development (R&D) investment intensity and improving the efficiency of R&D transformation. Regarding heterogeneity, firms display diverse patterns in the impact of digital transformation on ESG performance. Notably, firms characterized by high digital homophily, severe financing constraints, and substantial resource redundancy demonstrate a distinctly stronger ESG-enhancing effect of digital transformation. This study offers feasible pathways and policy insights for advancing corporate digital transformation, enhancing ESG performance, and contributing to the realization of the “dual-carbon” goals.
Guo et al. (Thu,) studied this question.