An Exploratory Study of the Relationship Between Corporate Social Responsibility and Financial Performance: The Role of Artificial Intelligence in Enhancing CSR and Financial Outcomes

Abstract

This paper aims to look into the concept of CSR and its link to financial performance, especially when AI is integrated into these activities. Businesses are gradually embracing sustainability and ethical practices in carrying out their activities, and the use of artificial intelligence in metrics, analytics, and automation, as well as ESG reports, are transforming CSR practice, measurement, and reporting. They have examined the link between CSR and financial performance but have not delved much into the role of AI in implementing CSR activities. This research is based on the qualitative research method; thus, the impact of AI in CSR is analyzed by conducting secondary data analysis and case studies with companies that have adopted AI in CSR. The study focuses on the factors of CSR that include improvement of AI efficiency, and how they help increase the company’s reputation and financial profit in the long run. In the literature, it has been observed that Level 4 AI helps in greater effectiveness of CSR execution in terms of operational impact, ESG monitoring, risk profiling, and investors’ confidence. AI-implemented CSR is more effective and efficient, M and has high financial returns compared to traditional CSR techniques. The paper extends the knowledge in this field by integrating AI as a moderator between CSR practices and financial performance and offers value for organizations with guidelines for the proper use of AI for profitable subsequent CSR practices. Lastly, policy implications that need to be considered are outlined to help the regulators create standardized frameworks for using AI in CSR. Further research direction includes analyzing CSR in relation to artificial intelligence ethics, legal issues, and the long-term financial effects of AI-facilitated sustainable development projects.