AI For ESG: Artificial Intelligence Can Help Save The Planet. Here’s How
By automating data collection and analysis, AI can boost transparency and visibility across reporting procedures.
By Shailendra Kathait
The growing trend of sustainability has led to a simultaneous rise in the eco-conscious population. This has led organisations to integrate sustainable practices within their operations to efficiently contribute to society and the environment. Enter AI for environmental, social, and governance (ESG), a vital tool for regulating processes and improving decision-making; thereby, advancing sustainability. As per a Deloitte survey, 75 per cent of Indian companies are currently reporting on their sustainability and ESG performance.
This highlights the growing significance of ESG within the companies and their commitment towards administering sustainable practices.
Role Of AI: Mastering ESG Excellency
Environmental balance: Comprehensive data collection, especially concerning social and governance, has remained a significant challenge for organisations. With the emergence of AI technologies, data collection has become a breeze.
By evaluating vast amounts of data and projecting trends, this cutting-edge technology enables companies to regulate their energy, waste consumption and resource allocation. This results in decreased carbon emissions and wastage. For example, AI-powered energy management tools offer real-time energy usage updates. This allows companies to target greater energy savings.
Social accountability: Social responsibility has become a key factor for individuals when making purchase decisions. Companies administering greater social accountability efforts are on the greater path of ensuring continued success. Thus, it has become essential for businesses to employ AI tools to conduct sentiment analysis. This would allow them to gather a profound view of public opinion. With this information, organisations can target personalised products and strategies.
External social responsibility is surely vital for companies to attract a loyal customer base. However, internal accountability plays a crucial part in guaranteeing employee retention. This is where AI-enabled diversity and inclusion tools come into the picture. They assist in promoting a transparent culture and a diverse and inclusive work environment.
Reinforcing ethics: Ethical considerations are integral to ensuring a company's long-term success and sustainability. With AI-backed tools, organisations can assess data and determine potential threats. This will enable them to detect fraud practices and ensure regulatory compliance. Consequently, it will lead to greater cost savings, enhanced efficiency, and sustainability.
By automating data collection and analysis, AI can boost transparency and visibility across reporting procedures. This will eliminate the possibility of potential errors and boost the credibility of ESG findings. Authentic and reliable ESG reports will significantly enhance stakeholder trust. According to EY, 90 per cent of international investors now evaluate a company's ESG performance as a key factor in determining its long-term resilience and sustainability.
AI-Enabled ESG: Way To Greener Future
The powerful combination of AI and ESG practices can unlock a lucrative breakthrough for organisations to fulfil their ESG goals. This, in turn, can unlock a sustainable path ahead. According to a sustainability survey by SAP, 77 per cent of Indian companies have seen revenue and growth benefits from their sustainability strategies, and 39 per cent plan to significantly ramp up the integration of sustainable practices into their operations.
Artificial intelligence has the potential to drive revolutionary changes across various company operations. Starting from preserving environmental balance, and cultivating social accountability to reinforcing governance and ethics, AI has the potential to transform organisational functioning.
By harnessing the might of AI to assess data, regulate processes and target data-driven decision-making, businesses can accomplish their ESG goals and champion sustainability efforts. With artificial intelligence amidst ongoing advancements and progress, its function in fostering a sustainable business environment will continue to evolve and prosper. This would open novel avenues for businesses to promote sustainability.
(The author is the Co-founder and Chief Data Scientist at Valiance Solutions)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.
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