Technology-driven sustainability: the impact of digitalization on ESG ratings of large companies

Abstract

This study investigates the relationship between digitalization and ESG performance in DAX 40 companies by combining correlation analysis with regression models that include firm-level controls. While bivariate correlations indicate a positive association between digitalization and the environmental and social components of ESG, these effects dissipate once market capitalization and other firm characteristics are accounted for. This discrepancy suggests that the initial correlations reflect structural firm attributes rather than an independent influence of digital transformation. Regression results show that firm size remains the strongest predictor of ESG performance, whereas digitalization exhibits limited explanatory power when considered in a multivariate context. Furthermore, the magnitude of the estimated effects is economically modest, indicating that digitalization contributes only marginally to substantive sustainability improvements. These findings imply that digital tools alone do not drive higher ESG outcomes; instead, they function as complementary enablers embedded within broader resource, governance, and regulatory conditions. The study contributes to the literature by clarifying the boundary conditions under which digitalization affects ESG performance and by highlighting the need for stronger theoretical and empirical differentiation between statistical associations and economically meaningful effects. First published online 14 October 2026