Environmental, social, and governance pressure and green innovation investment: the mediating role of managerial sustainability orientation and the moderating role of corporate governance quality
DOI:
https://doi.org/10.66578/btis.v2i2.27Keywords:
Corporate governance quality, Green research, Institutional theory, Managerial sustainability orientation, Stakeholder theoryAbstract
The incentive effects of Environmental, Social, and Governance (ESG) pressure on green innovation investment among firms operating in environmentally sensitive industries have examined in this study. Grounded in stakeholder theory, legitimacy theory, institutional theory, and resource-based theory, the research investigated how ESG pressure influences managerial investment decisions toward sustainable innovation. The study employed a quantitative and explanatory research design using survey data collected from 372 managerial professionals, including sustainability managers, finance managers, R&D managers, and governance officers. Data were analyzed using descriptive statistics, correlation analysis, multiple regression analysis, Structural Equation Modeling (SEM), mediation analysis, and moderation analysis. The findings revealed that ESG pressure significantly and positively influences green innovation investment, indicating that firms facing greater ESG-related scrutiny allocate more resources toward environmentally sustainable technologies, green research and development, and renewable energy initiatives. Managerial sustainability orientation was found to partially mediate the relationship between ESG pressure and green innovation investment, while corporate governance quality significantly strengthened this relationship through effective oversight and accountability mechanisms. The green innovation contributes to sustainable competitive advantage and long-term organizational resilience. The firms proactively integrating ESG considerations into strategic planning and governance systems are better positioned to enhance sustainability performance, stakeholder trust, and long-term competitive success.
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