How Can Generative AI Promote Corporate ESG Performance? Evidence from China

Generative AI has surfaced as a key driving force for corporate sustainable development and strategic transformation, offering new perspectives for effectively enhancing corporate ESG performance practices. Utilizing panel data sourced from Chinese A-share listed firms spanning the years 2012 to 2024, this research establishes and substantiates a model elucidating the mechanism by which generative AI impacts corporate ESG performance. The findings reveal the subsequent points: First, generative AI can effectively drive improvements in corporate ESG performance. Second, the caliber of information disclosure acts, in part, as an intermediary factor influencing the correlation between generative AI and corporate ESG performance enhancement. Third, sustainable innovation partially mediates the relationship between generative AI and corporate ESG performance enhancement. Fourth, environmental regulations weaken the beneficial influence exerted by generative AI on a company’s ESG achievements. Fifth, compared to non-manufacturing firms, companies situated in the central and western parts of China, and non-technology-intensive firms, the application of generative AI exerts a more pronounced enhancing impact on ESG achievements in manufacturing firms, firms in eastern regions, and technology-intensive firms. The research findings provide new insights for improving corporate ESG performance and provide strategic guidance for businesses aiming to attain long-term sustainable growth through reliance on generative AI.