How does artificial intelligence technology affect ESG performance? Evidence from China

Purpose The global revolution in artificial intelligence technology (AIT) is changing the process of enterprise resource orchestration, which holds great significance for achieving social and environmental sustainability. This study aims to examine the role of AIT in social and environmental sustainability by exploring how enterprises leverage AIT to influence environmental, social, and governance (ESG) performance, based on resource orchestration theory. Design/methodology/approach This study uses data from Chinese A-share listed companies between 2013 and 2022. The paper uses fixed-effects multiple linear regression for data analysis. Findings AIT can assist enterprises in enhancing their capabilities in ESG practices through resource orchestration, thereby improving ESG performance. AIT enhances ESG performance by improving green innovation capabilities and reducing agency costs. CEO power exerts a negative moderating influence on the relationship between AIT and ESG performance, whereas institutional investor ownership, the level of marketization in the firm’s region and media attention positively moderate the relationship. The positive effect of AIT on ESG performance is more significant in diversified and manufacturing enterprises. Practical implications The findings of the study have significant implications for the government’s policy formulation. The government can introduce policies conducive to the development of AIT, such as strengthening economic support, accelerating the marketization process and encouraging institutional investors to participate in governance, to guide enterprises to better leverage the role of artificial intelligence in enhancing the sustainability of society and the environment. Social implications The research shows that applying AIT strengthens enterprises’ capacity for ESG performance improvement. Enterprises can accelerate the integration process of AIT into production and operations based on their own characteristics. By fully using AIT, enterprises can save energy, reduce emissions and protect the interests of stakeholders, contributing to the sustainable development of society and the environment. Originality/value The study focuses on the capacity of AIT to create social value and explores the impact of AIT on ESG performance through resource orchestration processes. Furthermore, the paper examines new channels and moderating effects on the relationship between AIT and ESG performance, as well as heterogeneity among different types of companies. This research offers a fresh perspective and provides solid theoretical support for enterprises to promote the sustainability of society and the environment in the digital era.