The Role of AI in Sustainability Reporting

Using AI in Sustainability Reporting

One of the most important development in the ESG landscape is the implementation of IFRS S1 and S2 standards across various jurisdictions

These standards developed by the ISSB (International Sustainability Standards Board) have had over 30 jurisdictions globally (UK, Australia, Canada, Singapore, Hong Kong, Japan, Brazil etc.) have either expressed their intent or have started making these standards mandatory for large listed and private companies with an ultimate global of getting the whole economy to use these standards.

Over 20 jurisdictions — representing nearly 55% of global GDP and 40% of global market capitalisation — have taken steps to adopt ISSB Disclosure Standards into their regulatory frameworks.

This will greatly help in creating a level playing field for the disclosure of comparable and decision-useful ESG information. This will also put pressure on corporates to treat ESG information at the same level as the financial information but this requires corporates to put in the required systems and processes to make this happen. This will help with reducing the greenwashing issues across the economic system.

In response, entire teams are now fully dedicated to navigating the ESG landscape. Hundreds of hours of manual work, vendor calls and data requests.

Most organisations are spending between $175K–$360K per year on ESG solutions. And still much of that spend is regretted because the solutions require significant handholding for often mediocre outputs.

The pressure to comply is real. So is the confusion about how.

AI But Not As A Silver Bullet

AI tools are being used to gather information on specific aspects of ESG although it does not negate the governance and accountability aspects of ESG, which can only be solved by relevant stakeholders implementing systems and processes.

For example, institutional investors may leverage AI to better understand and analyse the ESG data collected from the companies they are invested in but the company itself needs better processes and systems to collect and provide good quality and verified data across its value chain.

What AI will do best is reduce those manual hours spent collating and force better questions around data quality and real impact.

We’ve spent months exploring how to reduce these challenges and with the launch of our proprietary AI product known as ESG360°Air, a tool built to automate ISSB Disclosure allowing your team to spend less time in the weeds and more time on decisions that matter. The tool is developed with a strategic human element always in play.

That’s the reason we say the future requires ‘ESG Data You Can Trust and Insights You Can Act On’.