Strategic Pathways to Decarbonization Through ESG Innovation in High‐Pollution Industries

Synergizing Digital Transformation and Sustainable Governance for Net‐Zero Goals

Bibliographic Data

ID22418682
AuthorsNaiping Zhu (0000-0002-1943-5958, School of Finance and Economics Jiangsu University Zhenjiang China), Ke Wang (0000-0002-4808-2637, School of Finance and Economics Jiangsu University Zhenjiang China), Abednego Osei (0009-0008-5072-9891, School of Finance and Economics Jiangsu University Zhenjiang China, corresponding author), Joseph Owusu Amoah (0000-0002-7031-1926, Center for Higher Education, Department of Educational Policy Studies and Practice University of Arizona Tucson Arizona USA, corresponding author)
Year2026
Publication date2026-05-28
Open AccessYes
TypeARTICLE
VenueBusiness Strategy and the Environment (JOURNAL)
Journal identifiersISSN: 0964-4733 • E-ISSN: 1099-0836
PublisherWiley (PUBLISHER • GB)
DOI10.1002/bse.71011
OpenAlexW7162694693
LanguageEN
References cited38

As global decarbonization targets tighten and stakeholder scrutiny intensifies, firms in high‐emission industries face growing pressure to translate sustainability commitments into measurable emissions reductions. However, evidence remains limited regarding which ESG dimensions most effectively drive decarbonization and through which mechanisms, particularly in emerging‐economy contexts. This study examines how ESG strategies influence decarbonization outcomes and whether these effects operate through digital transformation and depend on sustainable governance. Grounded in the resource‐based view and contingency theory, the study analyzes panel data from 574 publicly listed manufacturing firms in high‐emission industries in the MENA region over 2010–2023 using dynamic panel estimation and heterogeneity analysis. The results show that environmental and social strategies positively impact decarbonization, but with diminishing returns at higher investment levels, whereas governance strategy initially hinders decarbonization before becoming more effective as governance maturity increases. Mechanism tests indicate that digital transformation positively mediates the ESG–decarbonization relationship, and sustainable governance strengthens the effectiveness of ESG strategies. Heterogeneity analyses further suggest that ESG impacts vary across industries and ownership types. Policy implications emphasize strengthening governance and disclosure frameworks and providing targeted incentives for digital adoption and green technologies, particularly in high‐emission industries, to accelerate decarbonization in line with national sustainability goals.

Contingency · Corporate governance · Digital transformation · Incentive · Panel data · Stakeholder · Sustainability · Energy, Environment, Economic Growth · Environmental Sustainability in Business · Sustainable Supply Chain Management

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