Strategic Synchrony in Asian Emerging Economies: When Do AI and ESG Move Together?

This study examines the emerging phenomenon of strategic synchrony between the adoption of artificial intelligence (AI) and environmental, social, and governance (ESG) performance in firms from six major Asian emerging economies between 2017 and 2023. We define “strategic synchrony” as the deliberate alignment of AI adoption and ESG performance—measured as simultaneous top-quartile performance in both ESG scores and digital maturity within the same country, industry, and year peer group—potentially reflecting different underlying mechanisms. Despite widespread claims about the complementarity of digital transformation and sustainability initiatives, empirical evidence of their systematic co-elevation remains limited. Drawing on institutional theory and signaling theory, we explore whether the co-elevation of ESG and AI narratives reflects legitimacy signaling or organic integration, particularly in emerging markets where verification mechanisms are weak. Using a panel dataset of 1,260 firm-year observations from six Asian emerging economies, we examine the relationship between AI adoption, ESG performance, and their joint alignment. Logistic regression models reveal that AI adoption is associated with a higher likelihood of strategic synchrony (OR = 3.63, 95% CI [2.84, 5.58], p < 0.001), consistent with the view that digital transformation can function as a reputational amplifier in sustainability contexts. We also find that industry-level digital maturity (β = 1.14, p < 0.05), but not ESG pressure (β = 0.13, p = 0.19), is positively associated with synchrony, suggesting that structural and peer influences in technologically advanced industries facilitate strategic alignment. These findings contribute to the literature on symbolic management, digital legitimacy, and ESG decoupling, offering new insights into how firms construct strategic coherence under global institutional pressure.