ESG, Customer Equity and Shareholder Value in the Digital Economy: The Moderating Effect of AI-Enabled Digital Transformation Intensity among Listed banks in ASEAN and ECOWAS

Abstract This study examines how environmental, social and governance (ESG) performance contributes to shareholder value in digitally transforming banking markets by identifying customer equity as a value-conversion mechanism and artificial intelligence-enabled digital transformation intensity (AI-DTI) as a strategic boundary condition. Drawing on stakeholder theory, customer equity theory and the dynamic capabilities perspective, the study investigates whether customer equity mediates the ESG–shareholder value relationship and whether AI-DTI strengthens this mechanism among listed commercial banks in ASEAN and ECOWAS economies. A quantitative explanatory longitudinal design is employed using 1,193 bank-year observations from 79 listed commercial banks over 2010–2025. ESG performance, customer equity and AI-DT are measured using multidimensional archival indicators, while shareholder value is captured through a value-based financial measure. Fixed-effects and dynamic system generalised method of moments estimations are employed to address unobserved heterogeneity, persistence and potential endogeneity, complemented by mediation, moderated-mediation and regional heterogeneity analyses. The findings show that ESG performance does not exert a statistically significant direct effect on shareholder value; instead, its effect operates significantly through customer equity. Customer equity therefore represents a critical mechanism through which sustainability performance is converted into market-based value. AI-DTI further strengthens the ESG–customer equity relationship and significantly amplifies the conditional indirect effect of ESG on shareholder value. Moreover, the moderated indirect effect differs significantly between ASEAN and ECOWAS at higher levels of AI-DTI. The study advances stakeholder and customer equity perspectives by demonstrating that ESG creates financial value primarily when translated into customer-based intangible assets and enabled by digital capabilities. The findings imply that banks should integrate ESG, customer relationship strategies and AI-enabled transformation as complementary components of value creation rather than treating them as independent strategic domains.