Unlocking Sustainability Performance And Esg Component: Mediating Role Of Corporate Innovation

Abstract

This study investigates the relationship between sustainability performance and Environmental, Social, and Governance (ESG) components, with a focus on the mediating role of corporate innovation. Utilizing a quantitative approach, data were collected from a sample of 350 employees and analyzed using Structural Equation Modeling (SEM). The findings reveal three direct relationships: (1) ESG components have a significant positive impact on sustainability performance, (2) ESG components positively influence corporate innovation, and (3) corporate innovation directly enhances sustainability performance. Additionally, corporate innovation significantly mediates the relationship between ESG components and overall sustainability performance. Specifically, innovation acts as a catalyst, amplifying the positive impact of ESG practices on sustainability outcomes. The study contributes to the growing body of literature on sustainable business practices by highlighting the critical role of innovation in translating ESG initiatives into tangible performance improvements. Practical implications suggest that organizations aiming to enhance their sustainability performance should prioritize fostering a culture of innovation alongside robust ESG strategies. This research provides valuable insights for policymakers, corporate leaders, and stakeholders seeking to align business practices with sustainable development goals.

Keywords: Sustainability Performance, ESG Components, Corporate Innovation, Structural Equation Modeling (SEM), Mediation