Artificial intelligence and corporate ESG performance

• Published in: International review of financial analysis Vol. 102; p. 104036
• Main Authors: Li, Junjun, Wu, Tong, Hu, Boqiang, Pan, Dongliang, Zhou, Yaqiong
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.06.2025
• Subjects: Artificial intelligence; Corporate sustainability; ESG performance; Green innovation; Organizational resilience; Organizational resilience; Codes: G34; M14; ESG performance; Corporate sustainability; Q56; Artificial intelligence; Green innovation; O32
• ISSN: 1057-5219
• DOI: 10.1016/j.irfa.2025.104036

This study examined how artificial intelligence (AI) capabilities strengthen corporate environmental, social, and governance (ESG) performance while focusing on the mediating role of green resilience and the moderating effect of organizational resilience. AI has transformative potential for ESG performance; however, its role in emerging markets remains underexplored. While AI can optimize resource use, improve workplace safety, and enhance governance through transparency, challenges such as data limitations, infrastructure gaps, and ethical issues may hinder its impact. Bridging this gap requires focused research on how AI capabilities drive sustainable outcomes in these markets, identifying practical tools, and fostering supportive policies. We employed robust statistical techniques to establish reliable findings from a comprehensive dataset of Chinese-listed companies from 2011 to 2022. The findings indicate that AI capabilities significantly strengthen ESG performance. The relationship was facilitated through green innovation initiatives. Organizational resilience enhances AI's positive impact on ESG performance, especially in technology-intensive industries. However, the influence varies significantly by context, with stronger effects observed in nonhigh-polluting sectors and state-owned enterprises, highlighting the need for tailored approaches to maximize sustainable outcomes. Our findings augment the theoretical understanding of technology-driven sustainability by elucidating how AI capabilities strengthen ESG performance through innovation pathways. We identified key organizational factors, such as resilience and innovation capacity, as well as contextual factors, including industry type, regulatory frameworks, and ownership structures, that influence the relationship between AI and ESG performance. These findings provide valuable insights for organizations in emerging markets aiming to leverage AI for enhanced sustainability. •AI capabilities significantly enhance corporate ESG performance through green innovation, revealing a crucial mediating mechanism in technology-driven sustainability.•Organizational resilience positively moderates AI-ESG relationship, indicating resilient firms better leverage AI for sustainability outcomes.•Industry analysis shows stronger AI-ESG relationships in technology-intensive and non-high-polluting sectors than in labor-intensive industries.•State-owned enterprises demonstrate stronger AI-ESG relationships than non-SOEs, suggesting ownership structure influences AI effectiveness.•Multiple identification strategies confirm causality between AI capabilities and ESG performance, addressing potential endogeneity concerns.