Zhigang Fan, Xinan Zhang, Yewen Zhang, Mingu Kang, Qianfang Cui
Against the backdrop of Chinese modernization and high-quality development, how to enhance corporate sustainability through the integration of digital and physical technologies has become a central concern for both academia and practice. Based on panel data from Chinese A-share listed companies spanning 2009 to 2023, comprising 11,034 firm-year observations, this study systematically examines the impact of digital–real technology integration on corporate ESG performance. It further introduces organizational inertia as a moderating variable in this relationship. Anchored in dynamic capability theory, an analytical framework is developed and empirically tested. The results demonstrate that digital–physical convergence significantly improves ESG performance, while organizational inertia negatively moderates this positive effect. Heterogeneity analyses reveal that the promoting effect is more pronounced in non-state-owned enterprises, firms in central and western regions, and non-high-pollution industries, but less evident in state-owned enterprises, firms in eastern regions, and high-pollution industries. Further tests on ESG sub-dimensions show significant improvements in environmental (E) and governance (G) aspects, but no evident impact on social (S) responsibility. This study uncovers the mechanisms and contextual boundaries through which digital–physical convergence fosters corporate sustainability, providing empirical evidence and policy implications for the coordinated advancement of digital transformation and green governance.