The Impact of Artificial Intelligence Applications and Digital Transformation on ESG Performance of Chinese Listed Firms: Direct and Mediating Effects

This paper focuses on the dual pathways through which artificial intelligence (AI) applications and digital transformation directly or indirectly contribute to the ESG (environmental, social, and governance) performance of listed companies in China in the context of Peak Carbon and Carbon Neutral targets. This study empirically examines the direct impact of AI as well as the mediating effect of digital transformation on firms' ESG performance using a panel regression model constructed on the data of A-share listed companies in Shanghai and Shenzhen between 2003 and 2021.The results show that the adoption of AI technologies significantly improves firms' ESG performance, and that this effect is amplified through the mediating effect of digital transformation. The study provides a new perspective to understand the mechanisms by which AI technologies and digital transformation help to enhance firms' ESG performance, and it also provides important practical implications for listed companies in utilizing new and emerging technologies to achieve sustainable development.