Gen AI for ESG Reporting and Compliance
Teresa Wingfield
December 5, 2023
Environmental, social, and governance (ESG) initiatives assess and measure the sustainability and societal impact of a company or investment. The number of countries and even within the United States that are implementing mandatory ESG reporting is rapidly expanding. One of the most far-reaching laws is the European Union’s Corporate Sustainability Reporting Directive (CSRD), which requires companies to publish reports on the social and environmental risks they face, and on how their activities impact the rights of people and the environment. According to the Wall Street Journal, more than 50,000 EU-based companies and approximately 10,400 non-EU enterprises are subject to CSRD compliance and some of these companies will need to disclose as many as 1,000 discrete items.
Companies using manual processes for data collection will find it difficult to keep up with the breadth and depth of these mandates. This is why generative AI will begin to play a significant role in streamlining data collection, automating reporting, improving accuracy and transparency, identifying risks, and resolving compliance gaps.
How Generative AI Can Help With ESG Reporting and Compliance
Data Integration: Generative AI can help address various integration challenges and streamline processes such as data mapping and transformation, data conversion, data cleansing, data standardization, data enrichment, data validation, and more. This assistance allows companies to consider a wider range of data and criteria, which can lead to more accurate assessments of a company’s ESG performance and compliance.
Natural Language Processing (NLP): Generative AI models based on NLP can extract and analyze information from regulatory texts, legal documents, and compliance guidelines. This can be valuable for understanding and adhering to complex compliance requirements.
ESG Reporting Automation: Generative AI can automate compiling ESG compliance reports, reducing the time and resources required to gather, analyze, and present data.
Data Analysis: Generative AI can process and analyze vast amounts of data to provide insights related to ESG performance and compliance. It can identify trends, patterns, and areas to help a company improve its ESG practices.
Regulatory Change Analysis: Generative AI can monitor and analyze changes in regulatory requirements. By processing and generating summaries of new regulations and regulation updates, it helps organizations stay informed and adapt their compliance practices to changes.
Compliance Chatbots: Chatbots powered by generative AI can answer compliance-related questions, guide employees and customers through compliance processes, and provide real-time compliance information. Compliance chatbots can be particularly useful in industries with strict regulatory requirements, such as banking and healthcare.
Risk Assessment: Generative AI can analyze ESG data to identify potential risks that can lead to non-compliance, such as supply chain vulnerabilities, pollution, emissions, resource usage, and improper waste disposal, helping companies proactively address these issues.
ESG Investment: Generative AI can assist in creating investment strategies that help fill ESG compliance gaps by identifying companies or assets that meet ESG criteria.
How the Actian Data Platform Can Help
You may have clear and comprehensive ESG policies, but inadequate data collection, reporting, analytics, and risk assessment can lead to non-compliance and dramatically increase the time and resources needed for meeting extensive and demanding reporting mandates. The Actian Data Platform makes it simple to connect, manage, and analyze your compliance-related data. With the unified Actian platform, you can easily integrate, transform, orchestrate, store, and analyze your data. It delivers superior price performance as demonstrated by a recent GigaOm Benchmark, enabling REAL real-time analytics with split-second response times.
