*Article* **Can ESG Ratings Stimulate Corporate Green Innovation? Evidence from China**

**Heying Liu \* and Chan Lyu \***

School of Business, Macau University of Science and Technology, Macao 999078, China **\*** Correspondence: 2109853ebm30001@student.must.edu.com (H.L.); chlyu@must.edu.mo (C.L.)

**Abstract:** Green innovation serves as both a catalyst for businesses to pursue sustainable development and a crucial step in achieving green circular economic development. Green innovation is the practice of organizations considering environmental, social, and governance (ESG) aspects and the ESG advantages resulting from this process may become a driving force for enterprises to undergo a green transformation. Therefore, based on data related to Chinese A-share listed companies from 2009 to 2020, we study the relationship between ESG rating performance and corporate green innovation and its boundary mechanism. The results show that ESG ratings can improve the green innovation level of listed enterprises, and the relationship between ESG ratings and green innovation was also found to be strengthened by the institutional environment and redundant organizational resources. This study previously confirmed the positive impact of enterprises' ESG ratings on their green innovation, which has important implications for realizing the effective combination of ESG advantages and green innovation, promoting the construction of an ecological civilization, and realizing the concept of a community with a shared future for mankind.

**Keywords:** ESG rating; corporate green innovation; institutional environment; redundant organizational resources
