AI-driven green governance: Assessing the impact of artificial intelligence on corporate sustainability performance

As global climate change and sustainability challenges intensify, corporate green governance has become a key strategy for enhancing competitiveness. The rapid advancement of artificial intelligence (AI) offers new momentum for green governance innovation. Using panel data on Chinese listed firms from 2009 to 2023, this study examines how AI adoption influences green governance performance. The findings reveal that AI significantly enhances environmental performance, lowers ecological costs, and promotes sustainable innovation. The results remain robust across multiple specifications, with stronger effects observed in state-owned enterprises, financially constrained firms, and ISO14001-certified companies. Employing Bartik instrumental variables mitigates potential endogeneity concerns. Mechanism analysis demonstrates that AI fosters green governance through improvements in asset efficiency, market valuation, and cash flow management. These insights underscore the strategic importance of AI-driven green governance as a pathway toward corporate sustainability and competitive advantage.