AI-Driven Sustainability Reporting and Corporate Greenwashing: Legal Accountability and Governance Challenges in the ESG Era
Artificial intelligence is rapidly reshaping sustainability reporting, influencing how environmental, social, and governance (ESG) information is collected, analysed, and disclosed. While AI-assisted reporting improves efficiency and analytical capability, it also raises important concerns regarding transparency, accountability, verification, and AI-enabled greenwashing, creating new challenges for the credibility of sustainability disclosures. This study adopts a doctrinal legal research design supported by qualitative analysis, comparative regulatory assessment, and a structured review of legal, regulatory, and academic sources. It examines how emerging approaches to AI governance and sustainability reporting address these challenges and identifies the governance principles required to support trustworthy AI-assisted ESG reporting. Existing regulatory initiatives strengthen important aspects of sustainability reporting, yet AI governance, ESG disclosure, and greenwashing continue to be addressed through separate regulatory instruments. To bridge this gap, the study develops an integrated governance framework that combines transparency, meaningful human oversight, AI auditing, sustainability verification, and clearly allocated accountability within a coherent governance structure. The proposed framework contributes to the literature by offering a structured governance model specifically designed for AI-assisted sustainability reporting. The framework also provides practical guidance for regulators, standard setters, organisations, and assurance providers seeking to strengthen reporting integrity and stakeholder confidence in AI-assisted ESG reporting.