Under the "Dual Carbon" strategic goals, heavily polluting enterprises driven by environmental, social, and governance (ESG) principles to advance green innovation play a pivotal role in fostering green development and high-quality economic growth. This study employs a sample of Shanghai and Shenzhen A-share listed companies in heavily polluting industries from 2012 to 2022, empirically examining the impact of ESG performance on corporate green innovation. The result shows a significant positive relationship, confirmed by several robustness tests. Mechanism analysis reveals that ESG performance drives corporate digital transformation, thereby facilitating green technology innovation. Further heterogeneity analysis demonstrates that superior ESG performance significantly enhances green innovation levels in large-sized enterprises and non-high-tech industries within the heavily polluting sector. These findings provide empirical evidence to support green innovation initiatives in high-pollution firms and the formulation of adaptive government policies.

Yingyao Wang. The Impact of ESG Performance on Corporate Green Innovation in Heavily Polluting Enterprises. Academic Journal of Business & Management (2025), Vol. 7, Issue 8: 65-72. https://doi.org/10.25236/AJBM.2025.070809.

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