Purpose In response to intensifying climate regulations and rising stakeholder expectations for transparent carbon disclosures, manufacturing firms are increasingly seeking innovative approaches to strengthen their carbon accounting practices. While artificial intelligence (AI) has the potential to significantly enhance the accuracy, timeliness and efficiency of carbon accounting, its adoption remains uneven across firms. Prior studies largely focus on isolated technological or regulatory drivers, offering limited insight into how organizational sustainability maturity enables AI adoption. This study aims to examine how environmental, social and governance (ESG) maturity shapes key organizational enablers (i.e. technological readiness TER, top management support TMS and corporate social responsibility CSR orientation) and how these enablers, in turn, drive AI-driven carbon accounting innovation in the manufacturing sector. Design/methodology/approach Grounded in an integrated theoretical framework combining the technology–organization–environment perspective, resource-based view (RBV) and institutional theory, this study adopts a quantitative research design. Survey data were collected from top and middle management professionals in manufacturing firms operating across multiple industries. Structural equation modeling was used to test the proposed relationships and mediation effects. Findings The results reveal that ESG maturity plays a foundational role in fostering organizational conditions conducive to AI adoption. Specifically, ESG maturity has a significant positive influence on TER, TMS and CSR orientation. TER and TMS, in turn, significantly drive AI-driven carbon accounting innovation, while the effect of CSR on AI adoption was not significant. These findings indicate that the effects of ESG maturity on AI-driven carbon accounting are transmitted through these organizational mechanisms, highlighting ESG maturity as a strategic capability rather than a peripheral sustainability attribute. Practical implications This study offers actionable insights for managers and policymakers seeking to accelerate the adoption of AI-based carbon accounting systems. Manufacturing firms should view ESG maturity as a strategic investment that strengthens internal readiness, leadership commitment and a responsible organizational culture necessary for successful AI integration. Policymakers and regulators may support this transition by designing ESG-oriented frameworks and incentives that encourage firms to embed advanced digital technologies within their sustainability reporting practices. Originality/value Building on the growing discourse surrounding AI-enabled sustainability practices, this study advances the literature by framing ESG maturity as an enabling mechanism for AI-driven carbon accounting innovation.
Bin-Nashwan et al. (Mon,) studied this question.