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Does AI elevate corporate ESG performance? A supply chain perspective

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  • Boqiang Lin
  • Yitong Zhu

Abstract

As a pivotal catalyst for sustainable development, the evolution and integration of AI are propelling both companies and society toward a more efficient trajectory. Utilizing a multi‐period difference‐in‐difference (DID) model, the study assesses the impact of the 2019 China Artificial Intelligence Pilot (AIP) policy on corporate environmental, social, and governance (ESG). The study's findings are the following: (1) Optimizing corporate governance through artificial intelligence (AI), the AIP policy has significantly bolstered the ESG performance of companies in the pilot areas. (2) Mechanistic analysis demonstrates that the AIP policy elevates ESG by bolstering the efficiency of corporate supply chains. (3) Heterogeneity testing shows that the AIP policy exerts a more pronounced effect on non‐state‐owned companies, companies with high energy consumption, and those in the new energy sector. This manuscript furnishes empirical insights for evaluating the policy implications of AI development initiatives.

Suggested Citation

  • Boqiang Lin & Yitong Zhu, 2025. "Does AI elevate corporate ESG performance? A supply chain perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 586-597, January.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:1:p:586-597
    DOI: 10.1002/bse.3999
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    Cited by:

    1. Yu, Yang & Chan, Hau-Ling & Cho, Erin, 2026. "Enhancing ESG performance through digital transformation: Recent development, cases and relationships," Journal of Business Research, Elsevier, vol. 202(C).
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    3. Liu, Qilu & Du, Shanshan & Li, Min, 2025. "Green innovation perspective: Artificial intelligence and corporate green development," International Review of Economics & Finance, Elsevier, vol. 102(C).
    4. Xiatian Chen & Kaihua Bao & Chen Gao & Ya Wen & Ting Zhang, 2025. "Towards Corporate Sustainability: Can the Cultural and Tourism Consumption Promotion Policy Enhance Corporate ESG Performance?," Sustainability, MDPI, vol. 17(18), pages 1-28, September.
    5. Mou, Saiya & Wang, Xinquan & Hu, Feng, 2025. "Does privatization hurt ESG? The role of state-owned imprinting," Energy Economics, Elsevier, vol. 151(C).
    6. Augustino Mwogosi, 2025. "Leveraging AI to Enhance Healthcare Delivery in Tanzania: Innovations and Ethical Imperatives," SAGE Open, , vol. 15(3), pages 21582440251, September.
    7. Mu, Tian tian & Shan, Qiaojuan & Zhu, Guangyu & Xu, Yang & Agag, Gomaa & Alipour, Osman, 2026. "Beyond technology: The dual role of AI and narratives in driving ESG performance in China's retail industry," Journal of Retailing and Consumer Services, Elsevier, vol. 90(C).

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