The role of AI capabilities in environmental management: Evidence from USA firms

Anqi Jiao, Juntai Lu, Honglin Ren and Jia Wei

Energy Economics, 2024, vol. 134, issue C

Abstract: This study investigates the role of Artificial Intelligence (AI) capabilities in influencing firms' greenwashing behaviors. We find a robust negative association between firms' AI capabilities and unrepresentative environmental disclosure. An instrumental variable approach is employed to establish causality. The effects are more pronounced for firms (1) with a greater exposure to regulatory climate risk, (2) managed by Republican-leaning managers, (3) with stronger governance structures, (4) possessing greater product market pricing power, (5) operating in multiple regions, and (6) with CEOs with higher pay-for-performance sensitivity. We further demonstrate that AI capabilities aid firms in transitioning to green operations through engaging in green and clean innovation. Finally, we find that AI capabilities correlate with lower greenhouse gas emissions. Overall, our findings shed light on the real impact of AI-related technologies in the energy industry.

Keywords: Artificial intelligence; IT investment; Greenwashing; Environmental management; Innovation (search for similar items in EconPapers)
JEL-codes: L20 M15 O31 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:134:y:2024:i:c:s014098832400361x

DOI: 10.1016/j.eneco.2024.107653

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