Does ESG and Digital Transformation affects Corporate Sustainability? The Moderating role of Green Innovation

Abstract

Recently, environmental, social, and governance (ESG) has become an important factor in companies' sustainable development. Artificial intelligence (AI) is also a core digital technology that can create innovative, sustainable, comprehensive, and resilient environments. ESG- and AI-based digital transformation is a relevant strategy for managing business value and sustainability in corporate green management operations. Therefore, this study examines how corporate sustainability relates to ESG- and AI-based digital transformation. Furthermore, it confirms the moderating effect of green innovation on the process of increasing sustainability. To achieve the purpose of this study, 359 data points collected for hypothesis testing were used for statistical analysis and for mobile business platform users. The following conclusions are drawn. (1) ESG activities have become key variables that enable sustainable corporate growth. Companies can implement eco-friendly operating processes through ESG activities. (2) This study verifies the relationship between AI-based digital transformation and corporate sustainability and confirms that digital transformation positively affects corporate sustainability. In addition, societal problems can be identified and environmental accidents prevented through technological innovation. (3) This study does not verify the positive moderating effect of green innovation; however, it emphasizes its necessity and importance. Although green innovation improves performance only in the long term, it is a key factor for companies pursuing sustainable growth. This study reveals that ESG- and AI-based digital transformation is an important tool for promoting corporate sustainability, broadening the literature in related fields and providing insights for corporate management and government policymakers to advance corporate sustainability.