4.3. Measurement Model Evaluation
Before examining the structural relationships among constructs, the reliability and validity of the measurement model were evaluated. This includes factor loadings, Cronbach’s alpha, composite reliability (CR), and average variance extracted (AVE). These indicators ensure that each latent construct, Green Marketing, AI Integration, Environmental Sustainability, Social Sustainability, and Economic Sustainability, is measured consistently and accurately.
Table 4 presents the reliability and convergent validity results of the study constructs, including Cronbach’s alpha, composite reliability, and average variance extracted (AVE).
The reliability and validity of the measurement model were assessed before testing the structural relationships.
Table 4 reports the values of Cronbach’s alpha, rho_a, composite reliability (rho_c), and average variance extracted (AVE) for the constructs included in the measurement model: Artificial Intelligence (AI), Green Marketing (GM), Environmental Sustainability (ES), Social Sustainability (SS), and Economic Sustainability (ECS).
Cronbach’s alpha values ranged from 0.866 to 0.899, exceeding the recommended threshold of 0.70 [
45], indicating acceptable internal consistency among the indicators of each construct. The composite reliability values (rho_c) ranged from 0.909 to 0.926, which also exceeded the recommended threshold and support the reliability of the constructs.
Convergent validity was assessed using the average variance extracted (AVE). All AVE values exceeded the recommended minimum threshold of 0.50, ranging from 0.700 for GM to 0.759 for ECS, indicating that the constructs explained a sufficient proportion of the variance in their indicators.
Overall, the reliability and validity statistics reported in
Table 4 indicate that the measurement model satisfies the commonly recommended criteria for internal consistency and convergent validity.
4.5. Collinearity Statistics (VIF)
To assess multicollinearity in both the measurement and structural models, variance inflation factor (VIF) values were examined at the indicator level (outer model) and at the latent variable level (inner model).
Following the suggestion put forward by Ref. [
45], a VIF value less than 5.0 suggests the absence of multicollinearity issues, while values ranging from 3.3 to 5.0 indicate borderline multicollinearity in complex models. Moreover, a value less than 3.3 represents a more rigorous criterion, providing stronger assurance against common method variance and confirming the independence of the indicators.
Table 6 presents the VIFs, and as shown, the values were well within the acceptable levels, ranging from a low of 1.826 to a high of 2.960, well below the benchmark levels of 3.3 and the commonly cited 5.0 value. The results suggest the absence of multicollinearity and that the covariance was constant across the predictor variables. The moderate VIF values across each construct suggest that the indicators are unique and are not exhibiting uncharacteristic variability across their respective constructs.
Specifically, the VIF ranges for the AI construct ranged from 2.027 to 2.884, and the GM indicators ranged from 1.956 to 2.504, indicating a high level of independence for the indicators. The ES indicators ranged from 1.888 to 2.392, the SS indicators ranged from 1.826 to 2.323, while the ECS indicators ranged from 2.214 to 2.960. Moreover, no item was near the critical values, and they fell well below the low levels of the VIF for their respective constructs.
To further assess collinearity in the structural model, the variance inflation factor (VIF) values for the latent variables were also examined.
Table 7 presents the inner VIF values for the predictor constructs in the structural model.
All inner VIF values were below the recommended threshold of 3.3, indicating that multicollinearity is not a concern in the structural model.
4.8. Bootstrapping Results for Path Coefficients and Hypothesis Evaluation
The structural model was analyzed through a bootstrapping test with a total of 5000 subsamples to determine the significance of the hypothesized paths relating to the relationships involving GM, AI, ES, SS, and ECS.
Figure 2 illustrates the structural model and the estimated path relationships among the study constructs.
The results indicate that the direct effects of green marketing (GM) and artificial intelligence integration (AI) on the three sustainability dimensions were positive and statistically significant. Green marketing showed the strongest effect on economic sustainability (β = 0.474, p = 0.000), followed by environmental sustainability (β = 0.464, p = 0.000) and social sustainability (β = 0.460, p = 0.000).
Artificial intelligence integration also demonstrated positive and statistically significant effects on the sustainability dimensions, with path coefficients of β = 0.350 for environmental sustainability (ES), β = 0.362 for social sustainability (SS), and β = 0.342 for economic sustainability (ECS) (p = 0.000 in all cases).
The model also includes interaction terms to examine whether AI moderates the relationship between green marketing and the sustainability dimensions. The interaction effects were positive and statistically significant but relatively small. The interaction term AI × GM showed effects on ES (β = 0.089, p = 0.004), SS (β = 0.147, p = 0.000), and ECS (β = 0.087, p = 0.004).
The R2 values indicate a moderate level of explanatory power for the model, with GM and AI explaining 43.6% of environmental sustainability, 45.6% of social sustainability, and 44.1% of economic sustainability.
Table 9 summarizes the path coefficients and hypothesis testing results obtained from the bootstrapping analysis.
Overall, the results provide strong support for H1, H2, and H3, confirming the positive effect of green marketing on environmental, social, and economic sustainability.
Similarly, H4, H5, and H6 are supported, indicating that artificial intelligence integration has significant positive effects on all three sustainability dimensions.
Furthermore, the moderating hypotheses (H7, H8, and H9) are also supported, demonstrating that artificial intelligence strengthens the relationship between green marketing and corporate sustainability across its environmental, social, and economic dimensions.
4.9. Interviews Results
To complement the quantitative findings and gain a deeper understanding of how Green Marketing and Artificial Intelligence shape corporate sustainability practices within Palestinian industrial firms, a qualitative phase was conducted using semi-structured interviews with fifteen participants representing different managerial and operational roles across diverse industrial sectors. The purpose of this qualitative analysis was to explore the meanings, experiences, and organizational processes underlying the statistical relationships identified in the quantitative phase, allowing for richer interpretation and triangulation of results.
All interviewees were assigned anonymous participant codes to protect confidentiality while enabling the traceability of quotations throughout the analysis. These codes (e.g., MM-TX-007, PM-FM-015, SM-PL-014) corresponded to the participants’ roles and sectors, and the complete list of codes is provided in
Appendix C.
The following sections present the qualitative findings organized around the three dimensions of corporate sustainability, environmental, social, and economic, demonstrating how the participants’ narratives converge with, extend, or contextualize the quantitative evidence.
4.9.1. Environmental Sustainability: Interview-Based Insights
Throughout the interviews, the factor that was cited by the participants consistently as the most observable and measurable outcome of incorporating green marketing and artificial intelligence in their organization was environmental sustainability. The descriptions suggest that the improvements in the environment are not random but a result of the interaction of sustainable expectations in the marketplace and the tools used to measure the environment.
Several participants noted that sustainability projects and initiatives came from the marketing area because of the commitments made to the consumer, especially in light of the fact that consumers value sustainable packaging and responsible products for the environment. The marketing activity precipitated an organizational need to undertake cleaner production in terms of processes in production. The point was clearly made by one participant: “When marketing tells the consumer that packaging waste has been reduced, the production side feels the responsibility to make the commitment a reality” (SM-PL-014).
This trend has been supported by evidence of changes in manufacturing processes and the use of resources consistent with sustainability agreements. Delegates from a variety of manufacturing industries explained changes in product and packaging designs that have decreased the use of raw materials. A delegate from a packaging company said, “We’ve evolved our designs of packaging in a way that are not material-driven. Marketing this for our consumers benefits us, but it also benefits our company internally, related to our own carbon footprint” (MM-PK-013). The key point all delegates agreed upon was that artificial intelligence software has been instrumental in providing environmentally positive advancements for their companies. Increased efficiency, accuracy, and precision, as well as early problem detection, were highlighted as being of high priority. The production manager at one of the institutions where AI was applied described the transformative effect of AI in the area of waste management: “AI will be able to detect even the slightest inefficiency… It detects problems early, and we don’t throw out the whole batch the way we used to” (DT-PH-010). Another supervisor in the food production sector described how AI prevented food wastage through the monitoring of the accuracy of their filling process: “AI analyzes the filling accuracy and alerts us if there’s a problem. Just that has prevented considerable food wastage” (PM-FM-015).
The second prominent theme was the added efficiency in the utilization of energy and water. For industries where there is a considerable amount of utilization of energy and water, AI allowed for the dynamic optimization process that resulted in a considerable elimination of wastage. “The AI system watches the utilization of energy and water in the production lines. Whenever there is an abnormality, it sends an instant notification… It has reduced our electricity and water utilization to a considerable extent” (PM-CH-009).
Water users from the water-intensive sector, such as the textiles sector, reported a significant reduction in their water use because of the application of AI in process optimization. A quality assurance manager of a textile company illustrated the dyeing process: “It helped us in optimizing our dyeing process. We significantly reduced our water usage because the AI tool pointed out wasteful processes” (QA-TX-012).
AI acts as both a diagnostic tool and a solution in such cases where it detects the inefficiency that human observation cannot easily identify. The interviewed people also linked the implementation of AI with enhanced pollution control and environmental regulation to be in line with the environment and its sustainability. Since the traditional monitoring involved samplings and the process involved monitoring the environment periodically, it was quite unsuccessful in identifying any problems within the required timeframe. “The digital sensors are monitoring the emissions second by second. If anything exceeds the limit, we get an instant notification. This will protect the environment and the company will always be in compliance”, said the sustainability officer at SM-FM (SM-FM-008).
Worth mentioning in this context is the fact that the participants viewed AI not only as a tool for improving operational efficiency but also as a trustworthy source of verified environmental information, which enhances the authenticity of the green marketing campaigns. The fact that the marketing function is employing AI-based information to validate environmentally related claims in its communications has been highlighted by a number of the people interviewed. As one of the participants said, “The marketing function can claim with confidence that it has reduced its emissions and waste because the metrics come from AI monitoring systems” (DT-PH-010).
Throughout the interviews conducted, a constant theme was the complementarities of the two: “Of course, AI and green marketing complement each other. Marketing defines the objectives, and AI contributes to their achievement and measurement”, said one participant (SM-PL-014).
This view tends to confirm the finding in the quantitative approach, where a slight positive moderating effect was found, despite the fact that this aspect was not explored in the interviews in any detail.
On the whole, the interviews conveyed a clear message: the achievement of environmentally sustainable practices in industrial enterprises within the Palestinian territories implies a comprehensive approach in which green marketing establishes the strategic roadmap and AI helps in the process and its validation. Waste minimization, resource management, pollution management, and sustainability reporting are no longer individual accomplishments but the sum total of strategic marketing processes and precise AI-driven actions.
4.9.2. Social Sustainability: Interview-Based Insights
Through the interviews, social sustainability has been noted to be a clearly human-focused theme in the practices of the organization, driven by the need to establish the implementation of strategic and targeted marketing activities oriented towards greening the organization, along with the application of AI solutions. Within the context of the study, social sustainability is viewed as a process where environmentally responsible activity has positive rippling effects associated with employee and stakeholder relations and the well-being of the surrounding communities.
Several people highlighted that the initiatives involving digital and green technologies directly addressed employee safety and working conditions in a manner that created a space where employees felt protected and taken care of in a way that was safer and more considerate of their well-being. One of the participants said, “AI alerts us when the temperature is rising and the emissions increase, thus ensuring the safety of the employees. Employees feel safer because AI alerts us to potential dangers before they cause any harm” (SM-PL-014).
The importance of converging green technology and digital technology that benefits employee morale and development has been highlighted in this text. Not only that, in various replies, it was established that training related to new technology has helped employees in developing their confidence and skills. “Employees feel valued now. They know that if the company is investing in technology and developing them, they feel that they are growing along with the company” (SM-FM-008).
Transparency has been pointed out as a determinant that has a great impact on consumers in terms of trust. Interviewees agreed that transparency, in partnership with effective green marketing with support from AI, promotes authenticity and reliability in any business transaction. With the increasing demands of consumers for responsible actions concerning ethical and environmental matters, transparency has become a necessity. According to a marketing manager, “Customers value our transparency. Transparency of our responsible production practices promotes trust and loyalty” (MM-TX-007).
Social sustainability, as reported in the interviews, has to consider the internal working environment and the way the company interacts with its consumers in an ethical manner. Through the stories, another theme came out: improvements in production processes and commitment to sustainability helped to neutralize consumer worries related to the safety and quality of a product. The application of AI in quality monitoring tools was viewed as a means to enhance social responsibility in the prevention of defects and the sustenance of a stable quality level. This was supported by a company official: “AI helps produce safer and more reliable products. Our consumers understand that our processes run in a socially responsible manner” (DT-PH-010).
The participants also noted the links to greener and digital projects and the positive impacts upon the communities. Industry operations will always affect the environment and the communities, and a number of participants noted the importance of practices related to the environment and how they assist in the well-being of the communities. “With the reduced emissions, the air will be cleaner in the areas where our trucks pass through, and this has a positive effect”, said a logistics manager (SC-FM-011).
Apart from the environmental changes that the companies implemented, some undertook corporate social responsibility programs that related to the sustainability initiatives they undertook. The programs included recycling initiatives, donations of recycled materials to the communities, and teaching the communities through programs in schools and centers. “We run programs in the communities: schools and centers, teaching about recycling and responsible consumption” said a respondent from a textile company (QA-TX-012).
Within the group, the participants shared an understanding that the marketing campaigns conducted by the company improved consumer acknowledgment of the social commitments of the organization, thus making the actions more visible to the consumers. The packaging manager explained, “When we emphasize sustainable and safe practices, our consumers recognize us as socially responsible. It has become a part of our identity now” (MM-PK-013).
Instead, according to this view, marketing goes well beyond the realm of stakeholder communication, and its function is to align the internal values of the company with the expectations of the outside environment, and thus its contribution to societal well-being. Many members also cited the subtle but significant cultural transformation that has resulted from the simultaneous application of AI and sustainable marketing strategies. The members said that the implementation of sustainable strategies has assisted in the development of a corporate culture that focuses on responsibility and transparency in the organization’s relations with its stakeholders. One of the members who put the issue of the cultural transformation into perspective said, “We are a company that derives value from our relations… We think differently than other companies because AI and sustainability have altered the way in which we think as a company. We understand our impacts on people, not simply profits” (PM-FM-015).
In light of the above, the interviews demonstrate that a number of ways in which social sustainability is enhanced include better working conditions, higher trust levels in consumers, stronger ties with the local communities, and the fostered responsible corporate culture. The commitment to social responsibility is made more transparent and feasible through the medium of green marketing, and the assistance required for the commitment is facilitated through the application of AI.
4.9.3. Economic Sustainability: Interview-Based Insights
The findings highlight the focus on economic sustainability, where the participants consistently linked improvements in economic performance to the application of green marketing and AI. The reflections suggest that financial benefits are achieved in terms of measurable results and not expectations in organizations where environmentally oriented strategies are combined with AI applications and practices.
One of the themes that ran through the interviews was the direct and positive effect of artificial intelligence in relation to reduced costs, in particular waste and resource optimization. Several of the participants discussed the significant financial benefits of early problem identification made possible through AI. “AI gives us an early indication of the possible failure of the machines, thus preventing machine downtime… Unforeseen machine breakdowns are expensive; wee incur them no more” (Production Supervisor, PM-FM-015).
Cost savings resulted from the optimized use of available resources. The participants explained how artificial intelligence assisted in the identification of processes where high water and energy use was prevalent, resulting in changes in the organization to ensure long-term economic savings. “AI watches the consumption of energy and water in the processes… We noted machines that consumed higher levels of energy, and through the machines, we realized a significant cut in costs”, said a chemical sector participant (PM-CH-009). The said quotations are an indication that monitoring and making changes to processes leads to resource optimization, confirming the assertion that sustainable technologies strengthen economic resilience.
At the same time, waste reduction has also been proven to be an environmental success and an important factor in economic performance. The importance of monitoring the system in real-time to avoid the production of defective goods, resulting in the loss of materials and production costs, has been emphasized by many participants in the study. The view was well-expressed by a pharmaceutical company representative: “Before AI, defects resulted in the disposal of a lot of material. This seldom happens nowadays… and this results in a huge cost-saving for the company” (DT-PH-010).
The semi-structured interviews also provide insight into the added advantage of green marketing in terms of the competitiveness of products, where consumers consistently show allegiance to environmentally sustainable products and services. According to a marketing manager in the textile industry: “Customer response to sustainable goods has been quite favorable… Such consumers usually stick to organizations that take an interest in the environment, and this reflects in our sales” (MM_TX_007).
The respondents also emphasized the importance of sustainability commitments in forming partnerships, especially when large clients require suppliers to meet their sustainability standards. “Large clients will only partner with suppliers who meet the sustainability criteria. Our sustainable practices assisted us in winning contracts”, added a manager in the packaging and printing industry (MM-PK-013). The best practices cited above demonstrate how sustainable marketing practices, made possible by credible sustainability information generated through AI, improve the economic prospects of a business by opening the marketplace and new clients to a company.
Additionally, artificial intelligence has made the economy sustainable through better planning and predictions. For industries that experience qualitative in demands and for produce with a short lifespan, AI analytics helps in reducing the loss through the production of excess goods that are then discarded. “It forecasts the demand levels more accurately; without it, we would produce excess and dispose of some of the produce to avoid financial losses”, said a logistics manager working in a food company (SC-FM-011).
Moreover, the positive effect of sustainability efforts regarding efficiency and productivity in production has been considerable. According to a respondent, “Machines work better now… less breakdowns, less delays. This alone will improve our productivity and profitability” (PM-FM-015). The results above show the economic value when variability and system reliability are improved in terms of the environment and technology initiatives.
The participants also stressed the monetary aspects of transparency and credibility in noting that the credibility of sustainability reporting backed by AI data leads to the firms appearing trustworthy and competitive in the marketplace. “AI offers marketing hard numbers… If we report our sustainability success, our client trusts us, and our business relations improve”, said a pharmaceutical representative (DT-PH-010). The combination of the digital world’s focus on precision and the sustainability reporting area blends well in the importance of corporate reputation, the value of which cannot be overlooked in the marketplace because it has a monetary value associated with it.
It is noteworthy that some of the people interviewed viewed green marketing in and of itself as a factor in internal economic change in a company. When a company commits to the environment, it has to work in an optimal manner to live up to that commitment. This was explained by a plastics industry manager: “Green marketing forces us to be more effective in what we do, to minimize waste and improve process technologies because we said to the marketplace that we will do this” (SM-PL-014).
Taken together, the results of the interviews shed light on a unified and synergistic dynamic between GM, AI, and the three dimensions of business sustainability. Representative interview quotations illustrating these themes are summarized in
Table 10.
The importance of green marketing was perceived to be the strategic trigger that gives businesses the stimuli to reinvent their products, make the production processes cleaner, and be transparent in the way that the business interacts with its stakeholders. GM influences the organization’s strategic course in terms of setting expectations in the environment regarding its responsibility and ethics in creating value.
On the other hand, AI is the backbone that makes the commitments possible in terms of reducing waste, increasing efficiency, and improving safety through the provision of credible information that proves the company’s statements regarding the environment and social impacts. There was a clear pattern: GM presents the promise, while AI presents the performance. Improvements in environmental sustainability came from real-time monitoring, the prevention of defects, the control of pollution, and the efficiency of resource utilization, enforced by the strictures of sustainability messaging from the outside environment. Improvements in social sustainability, such as enhanced safety, transparency, and civic engagement, came from cleaner processes and the cultural change spawned by sustainability messaging. Economic sustainability was enforced through cost savings, competitiveness, and improved forecasts, where the message kept reiterating that sustainability and profitability are no longer at odds but march in parallel. Significantly, the message came that GM and AI are synergies and NOT solo actors in their respective domains but work together in harmony. This fits well into the results pattern where the direct effect and modest MIC pattern suggest a positive effect.