A global survey of 1,491 executives across 16 countries conducted by The Harris Poll for Google Cloud found that most executives aren’t measuring their environmental, sustainability and governance (ESG) metrics.
Only 36% of respondents said their organizations have measurement tools in place to quantify their sustainability efforts, despite 65% agreeing they want to advance these efforts.
Without accurate measurement, however, it’s hard to track progress.
In the face of this problem, more and more businesses are turning to artificial intelligence to improve their ESG reporting. MSCI, S&P Global, and LSEG are already successfully using AI to crawl ESG reports and extract insights.
How would AI work?
AI can sift through large amounts of data and identify trends, risks and opportunities quickly and efficiently. By using AI in their processes, firms are able to streamline their work and review huge quantities of data in a fraction of the time it would take a human analyst.
Using technology such as machine learning and natural language processing to analyse lots of data from a variety of sources, AI can identify patterns and spot any potential problems. Through this, AI could then provide insights into things such as working conditions, diversity metrics, and health and safety concerns.
Alternatively, AI could analyse data from audits, certifications, and reports to pinpoint potential issues in their operations and those of their suppliers. This would allow firms to more easily take action and report on their supply chain, for example.
How would AI help?
The World Economic Forum argues that when corporations can see the entire picture and understand all their ESG metrics properly, only then will they be able produce goals that provide meaningful change.
Not only that but research by IBM suggests that companies with more mature sustainability data capabilities outperform their peers in many key areas. IBM found that these outperformers have a 5% better rate of return on shareholder investment, a 10% higher annual rate of revenue growth and are 43% more likely to outperform peers on profitability.