The impact of Environmental, Social, and Governance (ESG) on innovation and sustainability

Abstract

This study analyzes and evaluates the role of Digital Transformation, Digital Leadership, and ESG in enhancing innovation and sustainable development based on survey results from 509 individuals, including employees and managers in the banking sector in Ho Chi Minh City (HCMC). By integrating fundamental quantitative analysis methods and the PLS-SEM structural equation modeling approach using SPSS and SMART PLS software, the study presents notable findings, specifically: (1) Digital Leadership (DL) positively impacts ESG factors (ESG), organizational innovation (IN), and organizational sustainability (SU); (2) Digital Transformation (DT) positively impacts Digital Leadership (DL), ESG factors (ESG), and organizational sustainability (SU); (3) ESG factors (ESG) positively impact organizational innovation (IN) and organizational sustainability (SU); and (4) ESG factors (ESG) play a positive mediating role in the relationship between Digital Leadership (DL) and both organizational innovation (IN) and organizational sustainability (SU). The study offers specific recommendations to promote innovation and sustainable economic development.