The new environmental protection law, ESG investment, and corporate innovation performance

Drawing on data from publicly traded Chinese companies spanning from 2009 to 2022, this article investigates the multifaceted impacts of executing the updated Environmental Protection Law. The findings suggest that the updated "Environmental Protection Law" significantly enhances corporate innovation performance. reflecting the policy's role in promoting sustainable development for enterprises. Furthermore, ESG investment acts as a mediating factor between the new Environmental Protection Law policy and the outcomes of corporate innovation, with this mediating effect showing significant heterogeneity between high-pollution and low-pollution enterprises. Specifically, high-pollution enterprises rely more heavily on ESG investment to enhance innovation capabilities under the policy's impetus, while low-pollution enterprises exhibit weaker dependency. Finally, the study also reveals that the positive impact of the new Environmental Protection Law varies significantly between China's eastern and central-western regions.