Bottom-up green spillovers: how corporate ESG drives green transformation in supply chains

The role of corporate ESG performance in generating green spillovers within supply chains remains underexplored in the context of global supply chain transformation. Using data from Chinese listed companies over the period 2010–2023, this paper constructs a ternary supply chain network to examine the bottom-up green spillover effects of ESG performance and the underlying mechanisms. The findings show that ESG performance generates significant bottom-up green spillover effects within supply chains. Downstream firms’ ESG performance significantly promotes the green transformation of midstream firms, while midstream firms’ ESG performance further drives the green transformation of upstream firms. Customer ESG performance facilitates supply chain green transformation through two channels: enhancing suppliers’ environmental awareness and promoting green technological progress. The strength of these effects depends on firms’ governance conditions and internal capabilities, and varies across institutional and industry contexts. These findings clarify the role of ESG as a supply chain governance mechanism and offer policy-relevant implications for coordinated green transformation across supply chains.