This article empirically tests the impact of enterprise digital transformation on ESG performance and its channel mechanism. Based on the data of Chinese listed enterprises from 2009 to 2019, this article uses crawler technology to capture the key words of “digital transformation” in the annual reports of enterprises and the collection of policies supporting enterprises’ digitalization in China to describe the intensity of enterprises’ digital transformation. We find that enterprise digital transformation significantly improves ESG performance. The intermediary mechanism shows that the improvement of enterprises’ digital transformation can improve enterprises’ ESG performance from three aspects: first, it can strengthen the effect of external supervision by improving information symmetry; second, it can promote the improvement of enterprises’ innovation output and innovation efficiency; third, it can optimize enterprises’ internal governance and reduce agency costs. Industry heterogeneity analysis shows that in industries with high degree of digital peers and monopoly, the improvement effect of enterprise digital transformation on ESG performance is more obvious. Based on the above findings, we put forward corresponding policy recommendations.
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