Dynamic Connectedness Between Artificial Intelligence, ESG, and Brown Asset Markets: Evidence from Energy, Metals, and Rare Earth Commodities

This research investigates the different strategies and the dynamic connectedness among AI, ESG, and brown assets from 19 March 2017 to 19 March 2025. Differentiating between contemporaneous and lagged spillover influences provides a detailed view of how the technology-driven and traditional energy sectors interact under shifting geopolitical and environmental conditions. The results indicate that the AI and ESG markets serve as the primary transmitters of information to traditional energy, particularly under extreme market conditions, including the second Trump administration and the Red Sea tensions. Despite rising geopolitical tensions, the findings document that such developments are catalyzing significant shifts toward AI and ESG markets. The findings demonstrate that integrating AI and sustainability principles enhances energy market stability, reduces systemic risk, and accelerates the transition toward low-carbon, climate-resilient energy futures.