Natural Language Processing Methods for Scoring Sustainability Reports—A Study of Nordic Listed Companies

Abstract

This paper aims to evaluate the degree of affinity that Nordic companies’ reports published under the Global Reporting Initiatives (GRI) framework have. Several natural language processing and text-mining techniques were implemented and tested to achieve this goal. We extracted strings, corpus, and hybrid semantic similarities from the reports and evaluated the models through the intrinsic assessment methodology. A quantitative ranking score based on index matching was developed to complement the semantic valuation. The final results show that Latent Semantic Analysis (LSA) and Global Vectors for word representation (GloVE) are the best methods for our study. Our findings will open the door to the automatic evaluation of sustainability reports which could have a substantial impact on the environment.

A Streamline Sustainable Business Performance Reporting Model by an Integrated FinESG Approach

“…With the help of these powerful and non-linear techniques such as machine learning, researchers have found prevailing disclosures in a company's ESG profile [45]. Gutierrez-Bastamante and Espinosa-Leal [6] proposed an evaluation of the degree of affinity of the Nordic companies' reports published within Global Reporting Initiatives (GRI). To achieve this goal, they implemented and tested a series of NLP and text extraction techniques.…”

“…But there are significant challenges, for instance, the need to report according to the requirements of multiple ESG frameworks and protocols and to coordinate inputs between functions, groups, and networks. In this context, more and more studies are oriented towards the quality analysis of sustainability reporting and ESG content analysis using various artificial intelligence algorithms, like natural language processing (NLP), machine learning (ML), or deep learning (DL) [1][2][3][4][5][6][7][8][9][10]. Corporate reporting has acquired new dimensions since the emergence and implementation of the triple bottom line (TBL) concept, and standards and regulations have been added to traditional financial reporting frameworks for reporting and disclosing information on environmental and social aspects, guiding companies towards a development sustainable business through management's integration of a TBL approach [11][12][13].…”