Understanding the CSR – AI Paradox: The Duality of Health Innovation and Environmental Responsibility in Consumer Perceptions

ABSTRACT The rapid adoption of artificial intelligence (AI) technologies in healthcare presents a paradox at the intersection of corporate social responsibility (CSR) and environmental sustainability. While AI‐driven health innovations promise life‐saving benefits and social good, their development often entails substantial carbon emissions that contradict environmental commitments. This study investigates the CSR–AI paradox by examining how consumers perceive and respond to the duality of health innovation and environmental responsibility in AI‐enabled healthcare products. Drawing on cognitive dissonance theory, moral licensing, and greenwashing frameworks, we conducted a scenario‐based experimental study to analyze consumer reactions to discrepancies between firms' environmental, social, and governance (ESG) claims and actual carbon footprints. We introduce and operationalize the concept of Carbon Accountability Elasticity (CAE) as a conceptual framework to quantify and guide analysis of trade‐offs between health utility and environmental accountability. The results reveal that greenwashing—particularly vague or unsubstantiated ESG claims—triggers significant consumer disappointment, reduces willingness to pay, and erodes trust, especially when high carbon footprints are disclosed post‐purchase. However, consumers demonstrate greater tolerance for environmental costs in the case of life‐critical innovations, such as AI‐powered cancer screening, highlighting a moral licensing effect. These findings underscore the importance of transparent ESG reporting and authentic sustainability practices in AI healthcare innovation. The study offers theoretical and managerial insights for advancing responsible innovation that aligns social benefit with environmental stewardship, supporting both sustainable development goals and stakeholder accountability.