Hao Yang

Population aging and environmental pollution have become critical challenges to global sustainable development. Against this backdrop, we aim to explore the largely underexamined economic role of corporate pension plans in promoting corporate environmental sustainability, beyond their traditional function of mitigating demographic aging risks. Leveraging China's rapid expansion of the second pillar of its pension system, we empirically investigate the association between corporate pension plans and firms' environmental sustainability practices, based on 51,435 firm-year observations of Chinese A-share listed firms over the period 2007–2024. Our results indicate that the implementation of annuity systems significantly enhances firms' green technology innovation. This finding remains robust across a battery of identification strategies, including instrumental variable estimation, Heckman two-stage models, propensity score matching, and placebo tests. Mechanism analyses suggest that annuity systems promote green technology innovation by improving the quality of human resources, alleviating financing constraints, and mitigating managerial myopia. Cross-sectional analyses further indicate that the effect is more pronounced as Chinese society transitions into the stage of deep aging, particularly in regions with higher levels of population aging, and among firms with greater levels of digitalization and corporate governance. Overall, our study integrates labor market dynamics with socio-ecological sustainability within the context of population aging, thereby providing novel insights into synergistic pathways for addressing demographic transitions and advancing sustainable development globally.