Bridging Digital Responsibility and Sustainable Development: How Corporate AI Ethics and International Innovation Drive ESG Performance

ABSTRACT As artificial intelligence transforms corporate operations globally, organizations face mounting pressure to integrate ethical AI practices within their corporate social responsibility (CSR) frameworks. This study investigates how corporate artificial intelligence ethics influences sustainable development outcomes, examining the critical role of international innovation as a moderator. Drawing on digital responsibility theory and technological ethical risk management frameworks, we analyze survey data from 449 corporations across China and Europe—two regions with distinct CSR regulatory environments and sustainability approaches. Our findings reveal that corporate AI ethics significantly enhances sustainable development performance, with this relationship strengthened by international innovation capabilities. While direct effects on innovation remain non‐significant, international innovation amplifies the sustainability benefits of ethical AI practices, particularly in European firms where stringent ESG regulations prevail. Regional analysis uncovers that Chinese firms leverage innovation more effectively for sustainability outcomes, whereas European firms demonstrate stronger moderation effects. These results provide actionable insights for organizations seeking to align AI deployment with ESG objectives and offer practical guidance for developing accountability mechanisms in digital transformation. The study contributes to CSR literature by demonstrating how ethical technology governance creates value for multiple stakeholders while advancing environmental and social sustainability goals.