AI, Sustainability and Value Creation: Empirical Insights from Saudi Banks (2015–2024)

The objective of this study is to investigate how responsible AI governance mechanisms influence value creation and sustainability in Saudi banks over the period 2015–2024. Using a panel dataset from listed Saudi banks and combining ESG disclosure metrics with financial indicators, we investigate whether AI adoption and AI-related disclosures enhance banks’ market and accounting performance while strengthening sustainability outcomes. We apply robust panel regressions, control for bank-specific characteristics, and run sensitivity checks to address endogeneity and measurement concerns. The empirical findings indicate that higher levels of AI adoption are positively and significantly associated with both value creation and sustainability performance. Furthermore, Dumitrescu–Hurlin panel Granger causality tests confirm a unidirectional causal relationship from AI adoption to both financial and sustainability outcomes. Overall, the results suggest that responsible AI integration may enhance sustainable value creation in the Saudi banking sector.