From symbolic to substantive green innovation: How does ESG ratings optimize corporate green innovation structure

Green innovation, primarily substantive green innovation, is critical for improving corporate sustainable development. In contrast to existing literature, this paper examines how environment, society, and governance (ESG) optimizes corporate green innovation structure from an innovation motivation perspective. Based on A-share listed firms, this study reveals a significant enhancement of ESG ratings in corporate green innovation structure, verifying that ESG ratings can promote the shifting from symbolic to substantive green innovation. This impact operates mainly through the monitoring and incentive effects. This paper theoretically enriches the related research and emphasizes the necessity of ESG construction for sustainable development in emerging economies.