AI-Driven Green Accounting in Saudi Private Firms: The Mediating Role of Data Granularity on ESG Reporting Excellence

Abstract

This study examined the impact of artificial intelligence (AI)-supported green accounting on the environmental, social, and governance (ESG) reporting excellence of Saudi private companies and considered how data granularity mediated that impact. In view of the heightened importance of sustainability reporting under Saudi Vision 2030, the study investigated the impacts of AI solutions—which include the automation and transparency of environmental reporting, predictive analytics of environmental costs, and resource allocation—on the quality of ESG reporting. A quantitative research design was adopted to collect data through a structured questionnaire from Saudi Arabian firms in the private sector. The measurement and structural models were analyzed by partial least squares structural equation modeling in SmartPLS. The results show that using AI in the development of green accounting positively and significantly affects all elements of ESG reporting. Additionally, data granularity plays a mediating role of a slight margin; that is, accurate, comprehensive, and properly organized data are an important factor in AI applications’ success in improving accounting practice for quality ESG reporting. The findings also point to the fact that merely adopting technology can do the trick, proper data management and accuracy are components that enhance the outcomes of ESG reporting. The conducted research makes a theoretical contribution by introducing AI-based green accounting concepts and data accuracy into the literature on ESG reporting, and it may inform the practical applications of managers and policymakers aiming to enhance Saudi private companies’ sustainability reporting practices.