This chapter explores the convergence of two major developments: the rise of environmental, social, and governance (ESG) investing and the exponential growth of artificial intelligence (AI) technology. The increased demand for diverse ESG instruments, such as green and ESG-linked loans, will be aligned with the rapid growth of the global AI market, which is expected to be worth $1,394.30 billion by 2029. AI can assist in identifying and pricing climate risks, setting more ambitious ESG goals, and advancing sustainable finance decisions. However, delegating sustainable finance decisions to AI poses serious risks, and new principles and rules for AI and ESG investing are necessary to mitigate these risks. This chapter highlights the challenges associated with norm-setting initiatives and stresses the need for the fine-tuning of the principles of legitimacy, oversight and verification, transparency, and explainability. Finally, the chapter contends that integrating AI into ESG non-financial reporting necessitates a heightened sense of responsibility and the establishment of fundamental guiding principles within the spheres of AI and ESG investing.

The current state of ESG programmes is not making an adequate difference for climate change fast enough. AI can help provide comprehensive ESG management solutions, reporting capabilities and actionable emissions insights. AI can ingest huge amounts of data, pull signal from noise and give companies a roadmap to meet ESG goals that make a real difference. The world is in a precarious condition due to climate change. Not surprisingly, companies are facing immense pressure from investors and customers to improve their transparency and performance on ESG issues, and many are getting positive feedback for their success. But the current state…

Were you unable to attend Transform 2022? Check out all of the summit sessions in our on-demand library now! Could artificial intelligence (AI) help companies meet growing expectations for environmental, social and governance (ESG) reporting? Certainly, over the past couple of years, ESG issues have soared in importance for corporate stakeholders, with increasing demands from investors, employees and customers. According to S&P Global, in 2022 corporate boards and government leaders "will face rising pressure to demonstrate that they are adequately equipped to understand and oversee ESG issues -- from climate change to human rights to social unrest."

We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 - 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Could artificial intelligence (AI) help companies meet growing expectations for environmental, social and governance (ESG) reporting? Certainly, over the past couple of years, ESG issues have soared in importance for corporate stakeholders, with increasing demands from investors, employees and customers. According to S&P Global, in 2022 corporate boards and government leaders "will face rising pressure to demonstrate that they are adequately equipped to understand and oversee ESG issues -- from climate change to human rights to social unrest." ESG investing, in particular, has been a big part of this boom: Bloomberg Intelligence found that ESG assets are on track to exceed $50 trillion by 2025, representing more than a third of the projected $140.5 trillion in total global assets under management.

At a 2020 meeting of the World Economic Forum in Davos, Salesforce founder Marc Benioff declared that "capitalism as we have known it is dead." In its place now is stakeholder capitalism, a form of capitalism that has been spearheaded by Klaus Schwab, founder of the World Economic Forum, over the past 50 years. As Benioff put it, stakeholder capitalism is "a more fair, a more just, a more equitable, a more sustainable way of doing business that values all stakeholders, as well as all shareholders." Unlike shareholder capitalism, which is measured primarily by the monetary profit generated for a business' shareholders alone, stakeholder capitalism requires that business activity should benefit all stakeholders associated with the business. These stakeholders can include the shareholders, the employees, the customers, the local community, the environment, etc.