Environmental, social, and governance (ESG) practices and Environmental performance: The mediation role of Technology Innovation

¹ FACULTY OF LAW, ECONOMICS AND SOCIAL SCIENCES, Ibn zohr university, Agadir, Morocco
² https://orcid.org/0009-0000-8721-6688

Abstract

As the worldwide community grapples with the mounting challenges brought on by climate change, a growing concern has emerged among scholars and policymakers alike regarding the continued sustainability of corporate environmental performance. This concern is not baseless, it is incumbent upon the world’s corporations, as significant contributors to global emissions and resource consumption, to not just maintain, but also continually improve their environmental stewardship. Therefore, this study explores the role of technological innovation as a mediator between environmental, social and governance (ESG) practices and firms’ environmental performance (PE) within companies that had made a public offering. These companies were chosen due to their balance between profit-making and ESG considerations, given their high level of scrutiny and accountability. Using the Partial Least Squares-Structural Equation Modeling (PLS-SEM) approach, the study simultaneously examined multiple relationships, making it well-suited to this exploratory research. The results affirm that the integration of ESG practices spurs technological innovation, subsequently enhancing environmental performance. Technological innovation is crucial in creating environmentally friendly products and processes, improving energy efficiency, and evolving waste management techniques. The findings highlight that strategic emphasis on ESG considerations and technological innovation can significantly uplift corporate environmental performance.