This study investigates the intricate relationship between CSR, green innovation, and environmental performance within the context of China’s manufacturing industries. Given the pressing environmental challenges faced by this sector, understanding how CSR practices correlate with sustainable innovations is critical for stakeholders aiming to enhance environmental outcomes. This was a survey-based study using a questionnaire and the five-point Likert scale; items were adopted from previous studies. Sampling was drawn through random sampling. Utilizing a sample of 327 respondents, this research employs SPSS and Structural Equation Modeling with Partial Least Squares (SEM-PLS) as analytical tools. The findings reveal a robust positive correlation between CSR practices and green innovation, as evidenced by a path coefficient of 0.704. These data support the stakeholder theory, which posits that organizations attentive to stakeholder expectations are more inclined to adopt sustainable practices. Furthermore, this study underscores the mediating role of green innovation in the relationship between CSR and environmental performance, highlighting its importance in aligning organizational strategies with sustainability-oriented stakeholder interests. This conclusion aligns with the existing literature emphasizing CSR’s significance in improving environmental performance through innovative approaches. However, an unexpected finding emerged: there exists a weak negative relationship between green innovation and organizational agility (−0.080). This suggests that, while firms strive for sustainable innovations, they may inadvertently compromise their flexibility in responding to evolving market demands. By addressing these dynamics, this research contributes valuable insights into how CSR can effectively spur green innovation and promote sustainable practices within China’s manufacturing sector. This study fills a gap in the existing literature by elucidating the mechanisms that connect CSR with enhanced environmental performance while also recognizing the potential trade-offs associated with innovation strategies. Also, the exploration of agility, which is least investigated, can also open various doors towards sustainability and the adaptation of new changes. Future research is encouraged to further explore these relationships across different industries and delve deeper into the mechanisms linking CSR to improved environmental outcomes, ultimately guiding organizations in balancing sustainability efforts with market responsiveness.
