Sweet Spots or Dark Corners? An Environmental Sustainability View of Big Data and Artificial Intelligence in ESG

Riding the Waves of Artificial Intelligence in Advancing Accounting and Its Implications for Sustainable Development Goals

“…Early identification of fraudulent activity helps to avert major monetary damages and protects firms' financial integrity [23]. AI also makes financial reporting easier through standardised and accurate reports procedures that ensure adherence to accounting laws and regulations and decreases the effort of manual reporting activities while improving financial statement reliability [24,25]. AI's predictive powers play an important role in forecasting and budgeting and empower firms to generate realistic financial estimates and effectively plan for the future [26,27].…”

Going beyond carbon: An "Earth System Impact" score to better capture corporate and investment impacts on the Earth system

“…Unfortunately, the approaches and frameworks available and used by the corporate and financial community to address sustainability are not currently up for the task (Savasta-Kennedy, 2014;Popescu et al, 2021). For one, sustainability reportingwhich is the main source of data allowing any kind of public assessment of corporate environmental impacthas been driven by Environmental, Social and Governance (ESG) factors, where environmental considerations are only seen as relevant for disclosure by firms if these pose a direct financial risk to the companies themselves (Crona et al, 2021;Crona and Sundström, 2023). Impacts caused by companies, but not directly captured by corporate risk management are largely ignored (Crona et al, 2021;Crona and Sundström, 2023;Grewal and Serafeim, 2020;Quigley, 2020;Richardson and Cragg, 2010).…”

“…For one, sustainability reportingwhich is the main source of data allowing any kind of public assessment of corporate environmental impacthas been driven by Environmental, Social and Governance (ESG) factors, where environmental considerations are only seen as relevant for disclosure by firms if these pose a direct financial risk to the companies themselves (Crona et al, 2021;Crona and Sundström, 2023). Impacts caused by companies, but not directly captured by corporate risk management are largely ignored (Crona et al, 2021;Crona and Sundström, 2023;Grewal and Serafeim, 2020;Quigley, 2020;Richardson and Cragg, 2010). Therefore, even when environmental externalities have been an explicit corporate concern, the data used to construct environmental performance measures often do not match the ambition of capturing absolute impact on the environment (Crona and Sundström, 2023).…”

“…Impacts caused by companies, but not directly captured by corporate risk management are largely ignored (Crona et al, 2021;Crona and Sundström, 2023;Grewal and Serafeim, 2020;Quigley, 2020;Richardson and Cragg, 2010). Therefore, even when environmental externalities have been an explicit corporate concern, the data used to construct environmental performance measures often do not match the ambition of capturing absolute impact on the environment (Crona and Sundström, 2023). Lack of environmental and sustainability expertise, and limited ability to scrutinize and understand environmental impact data in the rapidly growing ESG industry, investment community and within companies is a contributing reason for this (Schumacher, 2023).…”