Driving Sustainability Through Artificial Intelligence and Financial Innovation: The Roles of Green Innovation and Information Transparency in China

Shen, H, Zhang, L, Bonsu, MA and Kaodui, L (2026) Driving Sustainability Through Artificial Intelligence and Financial Innovation: The Roles of Green Innovation and Information Transparency in China. Business Strategy and the Environment. ISSN 0964-4733

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Abstract

How do firms' innovation capabilities shape the relationship between artificial intelligence (AI), financial innovation and environmental, social and governance (ESG) performance nexus? This study investigates this underexplored nexus using survey data from 267 Chinese firms, analysed with partial least squares–SEM and PROCESS models. Our results show that AI and financial innovation positively influence ESG performance, with green innovation and information transparency serving as key mediators. Sectoral and regional patterns suggest that AI-driven green innovation is particularly impactful in manufacturing, whereas financial innovation's effect on ESG performance is pronounced in financial institutions through enhanced transparency. Regional differences indicate that firms in Guangzhou benefit more from AI and financial innovation, while financial innovation's influence is stronger in Jiangsu. These findings highlight the strategic importance of integrating AI and financial innovation into their ESG initiatives, highlighting innovations and transparency to advance sustainable outcomes in emerging economies.

Item Type:	Article
Uncontrolled Keywords:	artificial intelligence; China; ESG; financial innovation; green innovation; transparency; 35 Commerce, Management, Tourism and Services; 3507 Strategy, Management and Organisational Behaviour; Networking and Information Technology R&D (NITRD); Machine Learning and Artificial Intelligence; 9 Industry, Innovation and Infrastructure; 12 Responsible Consumption and Production; 0502 Environmental Science and Management; 1501 Accounting, Auditing and Accountability; 1503 Business and Management; Business & Management; 3501 Accounting, auditing and accountability; 3502 Banking, finance and investment; 3507 Strategy, management and organisational behaviour
Subjects:	Q Science > QA Mathematics > QA75 Electronic computers. Computer science T Technology > T Technology (General)
Divisions:	Liverpool Business School
Publisher:	Wiley
Date of acceptance:	17 February 2026
Date of first compliant Open Access:	28 August 2026
Date Deposited:	28 Aug 2026 15:06
Last Modified:	28 Aug 2026 15:06
DOI or ID number:	10.1002/bse.70728
URI:	https://researchonline.ljmu.ac.uk/id/eprint/29225

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