Impact of AI Capability on Sustainable Performance: Mediating Roles of Green Absorptive Capacity, Green Knowledge Management, and Green Creativity in the Private Organizations in Pakistan

Abstract

Private companies in Pakistan must embrace AI-driven sustainability strategies to remain competitive while complying with environmental regulations. This study explores the impact of AI capability on sustainable performance, emphasizing the mediating roles of green absorptive capacity, green knowledge management, and green creativity. Data was collected from 425 people in private companies and analyzed using structural equation modeling in Smart PLS. The findings confirm that AI capability significantly enhances sustainability by optimizing knowledge-sharing processes, fostering green innovation, and improving organizations' ability to absorb and implement eco-friendly practices. By leveraging AI, private firms can enhance operational efficiency, reduce environmental impact, and drive sustainable development. This study contributes to the growing literature on AI-driven sustainability and provides a practical framework for businesses to integrate green knowledge management and innovation into their strategies. The results highlight the importance of AI in shaping the future of sustainable business practices, encouraging firms to adopt technology-driven solutions for long-term environmental, social, and economic benefits while gaining a competitive edge in the industry.