Data-driven green future: How can data elements reshape corporate sustainability?

With the development trend of the digital economy, data elements (DE) have become a key engine for production, with great power to improve corporate sustainable development performance (CSDP). This paper adopts data from Chinese A-share listed companies from 2010 to 2023. A DE measurement for a firm is approached through text analysis, and a comprehensive CSDP index is constructed based on the entropy weight method. The findings show that DE have a significantly positive effect on CSDP, and the effect is robust after endogeneity correction and a variety of robustness tests. The pathway effect analysis reveals that DE shape CSDP mainly through easing financing constraints, facilitating green investments, and optimizing both the extent and quality of green innovations, apart from the structural effect on agency costs. The heterogeneity analysis based on the Technology-Organization-Environment (TOE) framework also reveals that the DE-induced positive effect is more prominent with increased technological assets, enhanced organizational capacity, and a more favorable external setting. The results have important practical implications for companies that want to adopt a digital route towards sustainability and regulators that want to design better data governance and a digital-green transition.