Jury out on viability of AI in ESG reporting

AI climate

Environmental, social, and governance (ESG) reporting has proven to be a challenge for many companies, with some seeing it more as an opportunity to polish their eco-friendly credentials through “greenwashing” rather than provide meaningful disclosure.

But even those companies that want to follow best practice have said reporting requirements are onerous and unclear while metrics used to demonstrate progress are not standardized and deliver little value.

Typical complaints include the difficulty of reporting separately on ESG issues when a lot of the information is already contained in financial and risk disclosures; trying to collect, format, and check the relevant data from operations located around the world; and a lack of internal expertise to ensure reporting conforms with standards such as the Task Force on Climate-Related Financial Disclosures’ recommendations.

Unsurprisingly, tech vendors believe ESG reporting is a ripe market for artificial intelligence (AI) to help companies sift through the data and ensure compliance with both mandatory and voluntary reporting standards.

Compliance officers appear less sure.

lock iconTHIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.