The Impact of Digital Inclusive Finance on Corporate ESG Performance

Abstract

Against the backdrop of the “dual carbon” goals of carbon peaking and carbon neutrality, the advancement of sustainability disclosure regimes, the convergence of ISSB standards with domestic frameworks, the expansion of green investment and financing, and the normalization of supply chain due diligence, firms are facing increasing external pressures in capital markets. Enhancing ESG performance has become a critical pathway to sustainable development, playing a key role in reducing financing costs, strengthening innovation capacity, and improving corporate resilience. Using a sample of Chinese A-share listed firms from 2020 to 2023, this study combines the Peking University Digital Inclusive Finance Index with firm-level ESG data to construct a panel fixed-effects model, examining the impact of digital inclusive finance on corporate ESG performance and conducting heterogeneity analyses across industries. The results show that digital inclusive finance significantly improves corporate ESG performance. Both coverage breadth and usage depth exert important effects by promoting ESG-related innovation, thereby enhancing firms’ environmental, social, and governance performance. These findings remain robust across a series of robustness checks. Moreover, the effects exhibit significant heterogeneity across industries. Based on these findings, this study suggests further strengthening digital financial infrastructure and institutional frameworks, implementing differentiated policies across regions and industries, and guiding firms and regions toward a virtuous interaction between financing and technological development, so as to jointly advance ESG transformation and high-quality economic growth.