Aligning technological advancement and ESG performance principles: exploring the role of socio-cultural sensitivity and AI-driven innovation capability

Prior studies have investigated the impact of customer pressures on the environment, social and governance (ESG) performance from the perspective of managers; however, the present study analyses this relationship from the perspective of customers. This study frames socio-cultural sensitivity as a contextual factor and examines customer perceptions of ESG performance and how customers pressure firms to adopt social value practices and circular economy practices. While examining these relationships, the study also evaluates the moderating impact of AI-driven innovation capability that has not been empirically examined in the prior literature. The study collected the data from 356 customers in Delhi-NCR using a random sampling technique. The proposed relationships were analysed using the structural equation modelling approach in SmartPLS. The results reveal the extent to which customers’ perceptions of their pressures impact social value practices, circular economy practices and ESG performance for global value creation. The moderating role of AI-driven innovation capabilities was also investigated. The novelty of this study lies in evaluating customer perceptions instead of managerial perceptions. The study contributes to stakeholder and attribution theories and shows managers and practitioners how customers’ perceptions of ESG influence their attitudes and behaviours towards the firm.