AI-Enabled Sustainability Engagement and Organizational Resilience: The Mediating Role of Green Innovation Capability and the Moderating Effects of Managerial Capability and Environmental Turbulence

Authors

  • Mohammad Zahedipour

DOI:

https://doi.org/10.66578/btis.v2i1.23

Keywords:

Artificial intelligence, Environmental strategy, Organizational resilience, Green innovation, Dynamic capabilities

Abstract

This study examines how AI-enabled sustainability engagement enhances organizational resilience through green innovation capability within a dynamic capabilities framework. Drawing on time-lagged survey data from 812 industrial firms across Canada, the United States, and Mexico, we test a moderated mediation model using partial least squares structural equation modeling (PLS-SEM). The findings show that sustainability engagement significantly strengthens green innovation capability, which in turn enhances organizational resilience. The direct effect of sustainability engagement on resilience is marginal, indicating that adaptive stability primarily emerges through innovation-based capability development. Furthermore, dynamic managerial capability strengthens the relationship between sustainability engagement and green innovation, while environmental turbulence amplifies the effect of green innovation on resilience. The model explains substantial variance in both green innovation capability (47%) and organizational resilience (43%). By conceptualizing sustainability engagement as a digitally augmented environmental capability rather than a symbolic commitment, this study advances understanding of how firms build resilience under technological and regulatory instability.

References

Aboelmaged, M., & Hashem, G. (2019). Absorptive capacity and green innovation adoption in SMEs: The mediating effects of sustainable organisational capabilities. Journal of Cleaner Production, 220, 853-863.

Ambrogio, G., Filice, L., Longo, F., & Padovano, A. (2022). Workforce and supply chain disruption as a digital and technological innovation opportunity for resilient manufacturing systems in the COVID-19 pandemic. Computers & Industrial Engineering, 169, 108158.

Bianchi, G., Testa, F., Tessitore, S., & Iraldo, F. (2022). How to embed environmental sustainability: The role of dynamic capabilities and managerial approaches in a life cycle management perspective. Business Strategy and the Environment, 31(1), 312-325.

Borah, P. S., Dogbe, C. S. K., Dzandu, M. D., & Pomegbe, W. W. K. (2023). Forging organizational resilience through green value co‐creation: the role of green technology, green operations, and green transaction capabilities. Business Strategy and the Environment, 32(8), 5734-5747.

Browder, R. E., Dwyer, S. M., & Koch, H. (2024). Upgrading adaptation: How digital transformation promotes organizational resilience. Strategic Entrepreneurship Journal, 18(1), 128-164.

Butler, T. (2011). Compliance with institutional imperatives on environmental sustainability: Building theory on the role of Green IS. The Journal of Strategic Information Systems, 20(1), 6-26.

Dangelico, R. M., Pujari, D., & Pontrandolfo, P. (2017). Green product innovation in manufacturing firms: A sustainability‐oriented dynamic capability perspective. Business Strategy and the Environment, 26(4), 490-506.

de Medeiros, C. C. A. B., & Saurin, T. A. (2025). Individual and organizational resilience: Relationships, antecedents, and consequences. Human Factors and Ergonomics in Manufacturing & Service Industries, 35(2), e21063.

Dey, P. K., Chowdhury, S., Abadie, A., Vann Yaroson, E., & Sarkar, S. (2024). Artificial intelligence-driven supply chain resilience in Vietnamese manufacturing small-and medium-sized enterprises. International Journal of Production Research, 62(15), 5417-5456.

Ding, H. (2023). Common institutional ownership and green innovation in family businesses: evidence from China. Business Strategy & Development, 6(4), 828-842.

Esangbedo, C. O., Zhang, J., Perez, P. B., & Skitmore, M. (2024). Sustainable performance and supply chain leadership in logistic firms: the role of corporate sustainability strategies and digital supply chain. Supply Chain Management: An International Journal, 29(6), 963-977.

Falaleeva, M., O'Mahony, C., Gray, S., Desmond, M., Gault, J., & Cummins, V. (2011). Towards climate adaptation and coastal governance in Ireland: Integrated architecture for effective management? Marine Policy, 35(6), 784-793.

Ganuthula, V. R. R. (2025). AI-enabled individual entrepreneurship theory: redefining scale, capability, and sustainability in the digital age. Journal of Innovation and Entrepreneurship, 14(1), 85.

Godoy-Bejarano, J. M., Ruiz-Pava, G. A., & Téllez-Falla, D. F. (2020). Environmental complexity, slack, and firm performance. Journal of Economics and Business, 112, 105933.

Hair, J., & Alamer, A. (2022). Partial Least Squares Structural Equation Modeling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3), 100027.

Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of management review, 20(4), 986-1014.

Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the academy of marketing science, 43(1), 115-135.

Hodge, K., Subramaniam, N., & Stewart, J. (2009). Assurance of sustainability reports: Impact on report users' confidence and perceptions of information credibility. Australian accounting review, 19(3), 178-194.

Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration (ijec), 11(4), 1-10.

Larabi, C. (2025). Linking Innovation Capability, Strategic Orientation, and Strategic Renewal to Sustainable Performance: A Dynamic Capabilities Perspective in Saudi Small and Medium Enterprises. Business Strategy and the Environment.

Li, B., Teece, D. J., Baskaran, A., & Chandran, V. (2025). Dynamic Knowledge Management: A dynamic capabilities approach to knowledge management. Technovation, 147, 103316.

Liang, L., & Li, Y. (2023). The double‐edged sword effect of organizational resilience on ESG performance. Corporate Social Responsibility and Environmental Management, 30(6), 2852-2872.

Luo, X., Qian, W., Liu, M., Yu, X., & Liu, Y. (2024). Towards sustainability: digital capability, sustainable business model innovation, and corporate environmental responsibility of high‐performing enterprises in an emerging market. Business Strategy and the Environment, 33(6), 5606-5623.

McDougall, N., Wagner, B., & MacBryde, J. (2019). An empirical explanation of the natural-resource-based view of the firm. Production planning & control, 30(16), 1366-1382.

Medne, A., & Lapina, I. (2019). Sustainability and continuous improvement of organization: Review of process-oriented performance indicators. Journal of Open Innovation: Technology, Market, and Complexity, 5(3), 49.

Misuraca, G., & Viscusi, G. (2020). AI-enabled innovation in the public sector: A framework for digital governance and resilience. Paper presented at the International Conference on Electronic Government.

Moore, S. B., & Manring, S. L. (2009). Strategy development in small and medium sized enterprises for sustainability and increased value creation. Journal of Cleaner Production, 17(2), 276-282.

Mwansasu, E. L., & Mwagike, L. R. (2025). Environmental sustainability practices in supply chains and manufacturing firms’ performance: evidence from Tanzania breweries limited. SEISENSE Journal of Management, 8(1), 1-16.

Oshilalu, A. Z. (2024). Sustainability meets scalability: transforming energy infrastructure projects into economic catalysts through supply chain innovation. International Journal of Research Publication and Reviews, 5(12), 762-779.

Pang, R., & Zhang, X. (2019). Achieving environmental sustainability in manufacture: A 28-year bibliometric cartography of green manufacturing research. Journal of Cleaner Production, 233, 84-99.

Park, S., & Gupta, S. (2012). Handling endogenous regressors by joint estimation using copulas. Marketing Science, 31(4), 567-586.

Peng, B. (2024). Navigating green horizons: An empirical exploration of business practices aligned with environmental goals in the era of sustainable economy. Managerial and Decision Economics, 45(7), 4732-4752.

Qalati, S. A., Jiang, M., Gyedu, S., & Manu, E. K. (2024). Do strong innovation capability and environmental turbulence influence the nexus between CRM and business performance? Business Strategy and the Environment, 33(8), 7887-7904.

Qalati, S. A., Siddiqui, F., & Magni, D. (2024). Senior management's sustainability commitment and environmental performance: Revealing the role of green human resource management practices. Business Strategy and the Environment, 33(8), 8965-8977.

Sakina, I. S., & Dou, X. (2025). Ambidextrous leadership and sustainability performance: the mediating role of green product innovation and green process innovation. Strategy & Leadership, 1-24.

Shuen, A., Feiler, P. F., & Teece, D. J. (2014). Dynamic capabilities in the upstream oil and gas sector: Managing next generation competition. Energy Strategy Reviews, 3, 5-13.

Singh, G., Singh, S., Daultani, Y., & Chouhan, M. (2023). Measuring the influence of digital twins on the sustainability of manufacturing supply chain: A mediating role of supply chain resilience and performance. Computers & Industrial Engineering, 186, 109711.

Takyi, E., Gyimah, P., & Danquah, R. (2025). Exploring governance-driven sustainability accounting in a developing economy. Strategy & Leadership, 1-23.

Teece, D. J. (2007). Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic management journal, 28(13), 1319-1350.

Torrent‐Sellens, J., Enache‐Zegheru, M., & Ficapal‐Cusí, P. (2025). Promoting the European Sustainable Firm: How Economic, Social, and Green Innovation and the AI‐Based Technologies Create Pathways of Social and Environmental Sustainability. Business Strategy and the Environment, 34(7), 9093-9119.

Wang, S., & Zhang, H. (2025). Enhancing environmental, social, and governance performance through artificial intelligence supply chains in the energy industry: Roles of innovation, collaboration, and proactive sustainability strategy. Renewable Energy, 245, 122855.

Warf, B., & Sui, D. (2010). From GIS to neogeography: ontological implications and theories of truth. Annals of GIS, 16(4), 197-209.

Zada, M., Khan, S., Zada, S., & Dhar, B. K. (2025). Driving sustainable development through CSR leadership: Insights into organizational learning and technological innovation. Sustainable Development, 33(3), 4060-4074.

Zhang, X. e., Teng, X., Le, Y., & Li, Y. (2023). Strategic orientations and responsible innovation in SMEs: The moderating effects of environmental turbulence. Business Strategy and the Environment, 32(4), 2522-2539.

Zhou, Y., Shu, C., Jiang, W., & Gao, S. (2019). Green management, firm innovations, and environmental turbulence. Business Strategy and the Environment, 28(4), 567-581.

Downloads

Published

2026-03-31 — Updated on 2026-04-12

Versions