A Capability-Based Framework for Knowledge-Driven AI Innovation and Sustainability

As artificial intelligence (AI) technologies increasingly shape sustainability agendas, organizations face the strategic challenge of aligning AI-driven innovation with long-term environmental and social goals. While academic interest in this intersection is growing, research remains fragmented and often lacks actionable insights into the organizational capabilities needed to operationalize sustainable AI innovation. This study addresses this gap by exploring how knowledge-based organizational capabilities—such as absorptive capacity, knowledge integration, organizational learning, and strategic leadership—support the alignment of AI initiatives with sustainability strategies. Grounded in the knowledge-based view of the firm, we conduct a bibliometric and thematic analysis of 216 peer-reviewed articles to identify emerging conceptual domains at the nexus of AI, innovation, and sustainability. The analysis reveals five dominant capability clusters: (1) data governance and decision intelligence; (2) policy-driven innovation and green transitions; (3) digital transformation through education and innovation; (4) collaborative adoption for sustainable outcomes; and (5) AI for smart cities and climate action. These clusters illuminate the multi-dimensional roles that knowledge management and organizational capabilities play in enabling responsible, impactful, and context-sensitive AI adoption. In addition to mapping the intellectual structure of the field, the study proposes a set of strategic and policy-oriented recommendations for applying these capabilities in practice. The findings offer both theoretical contributions and practical guidance for firms, policymakers, and educators seeking to embed sustainability into AI-driven transformation. This work advances the discourse on innovation and knowledge management by providing a structured, capability-based perspective for designing and implementing sustainable AI strategies.