An integrated AI framework for managing organizational risk and climate change concerns in B2B market

Abstract

The United Nations identified sustainable development goals that focus on the three pillars of sustainability-Economy, Society, and Environment. The capability of Artificial intelligence (AI) for societal good and support to these three pillars is a matter of research importance. Drawing attention to literature on various AI frameworks for climate change and the dynamic capability theory, this study conducts a survey of managers working within their AI ecosystem of B2B firms. Confirmatory factor analysis and structural equation modeling are used to test the reliability, validity, and fitness of the research model. This model illustrates how big data-based AI system can influence business performance due to climate change. Research findings reveals paths involving “big data based artificial intelligence system”, “climate change competency process (prediction competency, mitigation competency, adaptation competency)”, “climate competent decision-making,” and “firm performance”, are statistically significant. As a part of research validation, three business cases are studied that focus on the decision-making capability of business under an uncertain environment. This study justifies that climate competent decision-making is a critical skill for businesses operating under uncertain environmental changes. This research brings out management perceptions generated due to climate change and discusses how they influence managers' behaviors that alter relationship dynamics and structure.