AI Integration in ESG Strategies: An Organisational and Institutional Perspective

Abstract

This study investigates the integration of Artificial Intelligence (AI) into Environmental, Social, and Governance (ESG) strategies, with a focus on institutional and organisational aspects within the context of Greek organisations. Using a quantitative design interpreted through institutional and organisational theory, the study explores how organisations use AI tools to advance sustainability, governance, and ethical goals. Despite the small sample size (N = 82), the study’s methodology uses penalised ordinal regression with cross-validation to enforce solid and trustworthy inference. The results indicate that AI maturity is the strongest and most consistent predictor of AI use in ESG reporting, while company size shows a meaningful association only with ESG strategy and sectoral effects remain weak. Drawing on Lipsky’s street-level bureaucracy framework and Weber’s bureaucracy theory, the study proposes at a theoretical level that interactions between frontline discretion and bureaucratic structures influence the ethical outcomes of AI projects. From an institutional perspective, AI adoption may function as a reputational strategy that enhances symbolic capital and organisational legitimacy. Businesses and organisations with established AI ethics policies acknowledge AI’s limited but occasionally significant contribution to social equality, while those without such policies often express uncertainty. Descriptive patterns indicate higher AI activity in certain sectors, although inferential tests show that sector effects are not statistically robust. The study concludes that responsible AI adoption requires ethical training and participatory governance models. Finally, it encourages more cross-country and cross-sector research using advanced analytics and composite indices to better understand institutional dynamics and the sociotechnical complexities of AI-enabled ESG governance. These discoveries improve our theoretical and practical knowledge of the moral application of AI in corporate sustainability.