From technology to sustainability: the role of AI in reducing corporate pollution

Purpose The purpose of this paper is to investigate how artificial intelligence (AI) pilot policies affect corporate pollution emissions in China. Specifically, this study aims to uncover the mechanisms through which AI influences environmental performance, including its impact on innovation, financing capacity and profitability. Design/methodology/approach This study uses a difference-in-differences approach to analyze the impact of AI pilot policies on corporate pollution emissions in China. This study uses data from Chinese listed companies and integrate innovative indicators to reflect corporate pollution. The analysis also explores the role of firm characteristics and geographic location in moderating the effect of AI on environmental performance. Findings The findings reveal that AI pilot policies significantly reduce corporate pollution emissions, with the effects being driven by improvements in innovation, financing capacity and profitability. Additionally, heterogeneous effects based on firm characteristics and geographic location are identified, highlighting the varying effectiveness of AI in promoting environmental sustainability across different sectors and regions. Originality/value This paper contributes to the growing literature on AI and environmental sustainability by examining the firm-level effects of AI policy interventions on corporate pollution emissions, a topic that remains relatively underexplored in empirical research. It provides new evidence on how such policies can reduce environmental impact by enhancing innovation, improving financing capacity and increasing profitability. Drawing on microlevel data from Chinese listed companies, this study offers a detailed perspective that supports the development of more targeted and effective strategies for promoting sustainability through AI.