Can supply chain digitalization open the way to sustainable development? Evidence from corporate ESG performance

Abstract In the digital economy era, the supply chain digitalization has become a crucial factor driving sustainable development. Based on the Chinese A‐share listed companies from 2011 to 2021, we use supply chain innovation and application pilots as a quasi‐natural experiment to empirically examine the impact of supply chain digitalization on corporate environmental, social, and governance (ESG) performance via a double machine learning (DML) model. The results indicate that supply chain digitalization significantly enhances corporate ESG performance, this conclusion remains valid after various robustness tests. Mechanism analysis shows that supply chain digitalization improves corporate ESG performance by enhancing internal operational efficiency, increasing interfirm trade credit, and enhancing external supervision. Finally, the promotion effect of supply chain digitalization on ESG performance is mainly present in corporates with stronger cooperative culture, stronger innovation capabilities, party organization, and those operating in heavily polluting industries.