Forbes.com, Ted Ladd, June 25, 2023
Sustainability has emerged as a top value indicator for investors and a significant deciding factor for consumers, leading companies to explore new ways to assess and demonstrate their sustainable contributions. Artificial intelligence can help companies generate these reports for multiple audiences. This is in the conclusion of a discussion led by Dr. Priyanka Shrivastava, a researcher and award-winning professor at the Hult International Business School.
One of the key challenges that companies face is how to measure sustainability when there are multiple subjective interpretations of what counts. Frameworks like Environmental and Social governance (ESG) and Sustainable development Goals (SDG) are being actively discussed among business stakeholders, investors, and government authorities to measure and scale the sustainability index of companies and quantify efforts. In today’s hyper-competitive landscape, an organization’s growth and success are sometimes defined by its decisions around socioeconomic and environmental considerations. Corporate Social Responsibility (CSR), which is often defined as “don’t do bad things” has transformed into a mandate to “do good”, encapsulated in the strategic priority of ESG or SDG.
Importance of Sustainability Reports
Popular rating agencies like S&P Global produce a sustainability index for individual companies. This measurement capture investors’ attention to benchmark long-term impacts and returns from a business. Organizations are harnessing the power of their cloud-based strategy to make sustainability data on companies readily available as part of open data initiatives by the cloud service providers (AWS, GCP, Azure). The Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), and the Task Force on Climate-Related Financial Disclosures (TCFD) are among the groups that are establishing standards to make 90% of S&P 500 indexed companies publish sustainability reports and make them readily available. In 2022, 95% of the companies in the S&P 500 index published a sustainability report, up from only 20% in 2011.
AI To Generate Sustainable Actions
AI empowers both sustainable business practices and reporting on the impact of these initiatives. For example, AI has the potential to facilitate the creation of smart cities and circular economies that make efficient use of resources. AI can also aid in the development of renewable electricity by enabling smart networks that partially match energy consumption to periods when the sun shines and the wind blows. AI positively drives environmental outcomes through its ability to analyze large-scale interconnected databases to develop coordinated actions aimed at environmental preservation.