WHEN AI POWERS SUSTAINABILITY: Divergent Paths for Enterprise ESG Performance in China

Ming Zeng () and Weike Zhang
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Ming Zeng: School of Economics, Xihua University, No. 999, Tuqiao Jinzhou Road, Jinniu District, Chengdu, China, 610039.
Weike Zhang: Corresponding Author, School of Public Administration, Sichuan University, No. 24, South Section 1, First Ring Road, Wuhou District, Chengdu, China, 610064.

Journal for Economic Forecasting, 2025, issue 3, 24-43

Abstract: The rapid advancement of artificial intelligence (AI) has the potential to enhance enterprises' Environmental, Social, and Governance (ESG) performance by improving their capability and motivation to engage in ESG initiatives. Nevertheless, the relationship between AI and enterprise ESG performance has not been extensively examined in the academic literature. Hence, this study explores the effect of AI on enterprises ESG performance, in China, utilizing a dataset comprising Chinese 1,270 publicly listed enterprises across 187 cities from 2006 to 2019. The findings indicate that AI enhances enterprise ESG performance, a conclusion supported by various robustness tests. However, the influence of AI on enterprise ESG performance exhibits heterogeneity. Additionally, the underlying mechanisms suggest that AI contributes to improved enterprise ESG performance by increasing analyst attention and facilitating digital transformation. Furthermore, marketization level and business environment can amplify the effectiveness of AI in enhancing enterprise ESG performance. These findings can offer valuable insights for the advancement of AI and the enhancement of enterprise ESG performance.

Keywords: Artificial intelligence (AI); Enterprise ESG performance; Analyst attention; Digital transformation; Marketization level; Business environment (search for similar items in EconPapers)
JEL-codes: D22 O33 Q56 (search for similar items in EconPapers)
Date: 2025
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