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In the era of artificial intelligence (AI), economic efficiency has an obvious role to play, but “non-economic benefits” have gradually become the focus of corporate attention; thus, environmental, social, and governance (ESG) has become a mainstream investment strategy. This paper empirically examines the impact of corporate application of AI technology on corporate ESG performance using a sample of 4858 listed companies in China from 2007 to 2022. The study finds that: (1) corporate application of AI technology can significantly enhance corporate ESG performance, and this conclusion still holds after a series of endogeneity treatments and robustness tests; (2) mechanism analysis shows that the degree of corporate digitalization has a positive moderating effect in the process of AI technology affecting corporate ESG performance. The channel analysis shows that the application of AI technology can enhance environmental (E) performance by strengthening corporate green technology innovation, social (S) performance by improving corporate philanthropic responsibility, and overall ESG performance with the above two sub-items as the main aspects. However, AI technology also weakens the effectiveness of corporate internal control, which leads to a decline in corporate governance (G) performance; (3) Heterogeneity analysis shows that AI technology promotes ESG more significantly in more competitive industries and tech-nology-intensive firms, and more significantly in the eastern and central regions than in the western and northeastern regions, and that large- and medium-sized firms are similarly superior to small-sized firms, while medium-sized firms have more room for upward mobility than large-sized firms, which embody a higher promotion effect than large enterprises. This paper provides theoretical evidence that enterprises apply AI technology to improve ESG performance and empirical support around investing in ESG practices and promoting ESG development.
Xie et al. (Wed,) studied this question.