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How Does Artificial Intelligence Improve Corporate ESG Performance?

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  • Wenlong Ren

    (School of Art and Design, Nanjing University of Finance and Economics, Nanjing 210023, China
    Yangtze River Delta Cultural Industry Development Institute, Nanjing University, Nanjing 210093, China)

  • Yue Yang

    (School of Art and Design, Nanjing University of Finance and Economics, Nanjing 210023, China)

  • Yuhuan Zhang

    (Beedie School of Business, Simon Fraser University, Burnaby, BC V5A 1S6, Canada)

  • Baocheng Zhao

    (Business School, Nanjing University, Nanjing 210093, China)

  • Yunshen Lou

    (Department of Industrial Development Research, Shanghai Economic Information Center, Shanghai 200050, China)

Abstract

Based on a 2012–2023 panel of 1774 Chinese A-share listed firms, this study examines how artificial intelligence transformation affects corporate ESG performance. We identify AI transformation from annual report text and estimate its effect using a DID framework. The estimates indicate that AI transformation is linked to higher ESG performance, with results remaining stable across alternative specifications. Further analysis indicates that green innovation and governance improvement are two main channels, with stronger effects among firms with state ownership, lower technological intensity, and heavier pollution exposure. These findings provide quasi-experimental evidence on the sustainability implications of corporate AI transformation.

Suggested Citation

  • Wenlong Ren & Yue Yang & Yuhuan Zhang & Baocheng Zhao & Yunshen Lou, 2026. "How Does Artificial Intelligence Improve Corporate ESG Performance?," Administrative Sciences, MDPI, vol. 16(6), pages 1-19, May.
    • Handle: RePEc:gam:jadmsc:v:16:y:2026:i:6:p:243-:d:1948862
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