Enhancing ESG performance through digital transformation : recent development, cases and relationships

Abstract

ESG initiatives have gained significant global attention, with many countries mandating ESG practices. Simultaneously, in the Industry 4.0 era, organizations have integrated digital technologies to transform their structures and innovate business models to advance ESG objectives. Despite digital transformation holds substantial potential to enhance ESG performance, the mechanisms underlying this relationship remain under-explored. This study aims to investigate how digital transformation influences ESG outcomes, with a particular focus on the mediating and moderating factors involved. First, we systematically review the existing literature, categorizing it into three key areas: digital transformation, digital technology innovation, and artificial intelligence, for discussion. Next, we examine two real-world cases where digital technologies have been leveraged to facilitate ESG practices. Finally, based on the reviewed literature and real-world cases, we highlight three important factors and propose a promising future research agenda that deserves further in-depth investigation.