The problem of environmental protection and sustainable development is increasingly concerned, and how to promote the green innovation of enterprises has become the focus. Based on the data of China’s A-share listed companies from 2011 to 2023, the mechanism of institutional co-ownership on corporate green innovation behavior was explored. It is found that institutional co-ownership can effectively promote corporate green innovation, and this conclusion remains valid after various robustness tests. Corporate ESG(environmental, social, and governance) shows a partial mediating effect between institutional co-ownership and corporate green innovation, that is, institutional co-ownership can motivate companies to improve their ESG performance to a certain extent, thus promoting the realization of green innovation. The digital transformation of enterprises has a positive moderating effect on the relationship between corporate co-ownership and corporate green innovation.