How Does Digital Transformation Impact ESG Performance in Uncertain Environments?

The influence of digital transformation on ESG performance has garnered considerable interest; however, previous research in this area has not adequately considered the influence of environmental uncertainty factors. This study utilized a dataset comprising Chinese A-share listed companies from 2009 to 2023 to explore how environmental uncertainty affects the correlation between digital transformation and ESG performance. Furthermore, we also examined potential pathways and heterogeneity. Our findings demonstrate that digital transformation significantly enhances ESG performance, with the positive effects persisting for up to three years post-implementation, although gradually diminishing in intensity. However, environmental uncertainty substantially reduces this positive impact across all pivotal technologies. Improvements in ESG performance are more pronounced in firms that are high-tech, technology-intensive, and capital-intensive and that do not produce heavy pollution. Quantile regression reveals that firms in the upper–middle ESG performance range benefit most. Our mediation analysis confirms that digital transformation enhances ESG performance by increasing firm value, media attention, and analyst coverage. Overall, this study contributes to the existing literature by providing empirical evidence of the impacts of environmental uncertainty. These findings provide strategic guidance for companies navigating digital transformation initiatives in turbulent business environments, while also offering concrete recommendations for regulatory authorities developing ESG disclosure frameworks and digital infrastructure investment priorities tailored to different uncertainty conditions.