Driving sustainable development through behavioral change: the role of generative AI, digital literacy of leaders and responsible innovation

Purpose This study investigates the relationship between Generative AI (Gen AI) adoption, leaders’ digital literacy, and responsible innovation practices in shaping organizational culture and behavioral adjustments that directly support sustainable development outcomes (SDOs). The goal is to explore how ethically aligned AI integration, when supported by contextual understanding and workforce readiness, can enhance sustainability efforts. Design/methodology/approach The quantitative empirical survey collected data from 450 employees working in social media agencies in Pakistan, through convenience sampling technique within 4 months. The study employs moderation-mediation through the process model, using SmartPLS software. Findings All eight hypotheses were supported. The study finds that SDOs are achievable through the integration of cultural, technological and ethical complexities. Responsible innovation practices and a sustainability-focused culture are critical to ensuring Gen AI contributes positively to organizational sustainable goals. Practical implications Practitioners and global trainers should invest in workforce upskilling through digital literacy and AI competency equipping employees to engage with AI technologies, driving innovation and sustainability. Moreover, organizations need to focus on sustainable, ethical and socially beneficial outcomes while minimizing the risk. Social implications Regulators, with the support of AI solutions, can promote community engagement that runs parallel with societal values, fostering trust and collaboration. Furthermore, policy makers need to promote digital literacy for bridging the gap of digital divide and offer equitable access to all stakeholders, enabling them to benefit from technology. Originality/value This study uniquely integrates Generative AI adoption, leaders' digital literacy, and responsible innovation into a single behavioral framework for sustainable development. By providing empirical evidence from an emerging economy, it advances sustainability literature and offers actionable insights for ethically aligned AI-driven cultural and behavioral transformation.