The Impact and Process of the ESG Peer Effect on Heavy-Polluting Companies' Green Innovation. Case of companies in the United Kingdom

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🔬研究者:Findings on mediating mechanisms (financing constraints, information asymmetry) offer testable hypotheses for cross-country or cross-industry studies on ESG and innovation.

🏢実務担当者:Corporate sustainability teams can leverage peer benchmarking to strengthen green innovation strategies and anticipate competitive dynamics from disclosure.

🏛政策担当者:Regulators should consider that peer effects from ESG disclosure can amplify the impact of disclosure mandates on real environmental outcomes.

Environmental innovation has become increasingly important for heavy-polluting companies because environmental pollution, climate change, and carbon reduction targets require firms to strengthen ecological responsibility and improve green technology innovation. ESG disclosure provides non-financial information to the market and may influence corporate green innovation not only directly, but also through the behaviour of peer companies operating in the same industry. This study examines the impact of the ESG peer effect on green innovation in heavy-polluting companies in the United Kingdom and investigates the mechanisms through which peer ESG disclosure promotes ecological innovation. The study uses data from heavy-polluting companies observed during 2018-2024. The ESG peer effect is measured as the average ESG score of other firms in the same industry, excluding the target company. Green innovation is measured by the natural logarithm of green patent applications plus one. The empirical analysis applies fixed-effects regression models, robustness tests, mediation mechanism tests, and heterogeneity analysis. Financing constraints, information asymmetry, and green awareness are examined as mediating mechanisms. The findings show that the ESG peer effect has a positive and statistically significant influence on green innovation. The baseline regression results indicate that ESG peer disclosure promotes ecological innovation among target companies, and the results remain valid after robustness checks, including Tobit regression, shorter sample period, lagged explanatory variables, and propensity score matching. The mediation analysis shows that the ESG peer effect promotes green innovation by reducing financing constraints, lowering information asymmetry, and strengthening corporate green awareness. Heterogeneity analysis reveals stronger effects among state-owned enterprises, large firms, and firms located in central and eastern regions. ESG peer disclosure encourages heavy-polluting companies to improve green innovation through competitive pressure, learning effects, and information signalling. Future studies should expand the sample to other industries and countries and examine additional mechanisms linking ESG performance, innovation strategy, and environmental transformation.

• semanticscholar https://public.scnchub.com/efmr/index.php/efmr/article/download/377/313first seen 2026-07-18 07:52:57