Abstract

Climate change introduces new challenges for businesses which require them to find ways to be resilient. Green innovations contribute to boost Environmental, Social, and Governance (ESG)‐readiness leading to just transition without optimization. This study estimates the nonlinear effect of environmental innovation in ESG‐readiness against climate change while allowing for the moderating role of citations from regenerative AI‐research. We use BRICS countries to conduct the analyses with a machine learning based Panel‐QARDL. We find that green innovations trace an inverted U‐shaped effect and generative AI shifts this relationship upwards. Findings highlight the role of regenerative AI in boosting green innovation performance.