How Employee Perceptions of Environmental, Social, and Governance Practices Relate to Innovative Work Behaviour

Abstract

ABSTRACT As environmental, social, and governance (ESG) principles become integrated into corporate sustainability strategies, how ESG practices relate to employee innovation remains underdeveloped. Drawing on the stimulus‐organism‐response framework and Job Demands‐Resources theory, this study examines whether employee perceptions of ESG practices are associated with innovative work behaviour through three internalisation mechanisms: creative self‐efficacy, psychological safety, and job crafting. Using a three‐wave time‐lagged survey of 509 employees in China's new energy vehicle industry and partial least squares structural equation modelling, the findings show that perceived ESG practices are positively associated with innovative work behaviour. Creative self‐efficacy and psychological safety provide significant indirect pathways, whereas job crafting does not. These findings indicate that ESG perceptions are associated with employee innovation through differentiated cognitive and socio‐emotional pathways. The study provides an incremental theoretical contribution by extending micro‐level CSR research to an integrated ESG context and differentiating how employees internalise ESG practices.