Automating Sustainability: How Climate Action Unlocks the ESG Potential of Industrial Robotics

ABSTRACT The convergence of Industry 4.0 and global sustainability goals presents a critical paradox: while automation drives efficiency, its net impact on comprehensive environmental, social, and governance (ESG) performance remains contested. This study investigates the relationship between industrial robot and country‐level ESG performance across 63 countries over the period 2010–2024. We construct a novel entropy‐weighted composite ESG index integrating 60 indicators across ESG dimensions. The results demonstrate that industrial robots enhance ESG performance. Mediation analysis reveals that this effect operates not only through direct operational efficiency but through two transmission channels: innovation and human capital. Crucially, threshold regression uncovers nonlinear dynamics: using climate actions—measured through climate change adaptation and mitigation—as threshold variables, we find that the robotics–ESG relationship is negative or negligible under weak climate actions but amplifies substantially once countries surpass critical policy thresholds—a pattern consistent with policy‐dependent regime switching. Spatial analysis further reveals a distance‐decay effect, whereby ESG gains from automation are concentrated among countries proximate to major robotics innovation hubs (Japan, the United States, and Germany) and attenuate with geographic distance. Heterogeneity analysis identifies digital infrastructure maturity as the most powerful conditioning factor, with digitally advanced countries experiencing nearly fourfold greater ESG returns from robotics, while countries with limited digital capacity exhibit negative returns. These findings suggest that realizing the sustainability potential of industrial automation requires integrated policy frameworks that synchronize climate governance, innovation ecosystems, human capital investment, and digital infrastructure development.