How does artificial intelligence impact corporate ESG performance? The catching−up effect of digital technological innovation

Against the backdrop of the deep integration between the digital economy and corporate sustainable development, this study uses the national New Generation Artificial Intelligence Innovation and Development Pilot Zone (AI_IDPZ) policy as a quasi-natural experiment. Based on data from Chinese A-share listed companies from 2009 to 2023, this study employs a difference-in-differences model to empirically examine the impact of artificial intelligence (AI) on corporate environmental, social, and governance (ESG) performance and its underlying mechanisms while revealing the catching-up effect of digital technological innovation through heterogeneity analysis. Results show that the AI_IDPZ policy has a significantly positive impact on corporate ESG performance. The policy systematically enhances firms’ ESG through multiple pathways, including digital transformation, green innovation, and corporate social responsibility information disclosure. This policy effect manifests as a “catching-up effect” of digital technological innovation for ESG laggards in regions with lower digital economic development levels and firms with weaker digital transformation foundations. Specifically, entities with initially weaker technological bases can more effectively use AI technology to narrow their ESG gap with leading counterparts and achieve leapfrog improvements in sustainable development performance through policy empowerment. This catching-up effect is driven by technological innovation and market participation. By expanding the technological innovation perspective in ESG research, this study provides a theoretical foundation for policymakers to optimize region-specific support strategies and for corporate managers to design digital ESG improvement pathways. It also offers new empirical evidence on how technological innovation can drive corporate sustainable development in the digital economy era.