How AI Can Take ESG Reporting to Next Level

Companies are facing more pressure to produce accurate and comprehensive environmental, social and governance (ESG) reports as new directives are introduced and regulatory oversight increases. This has led to some issues, with some companies having to deal with data unavailability and ensuring the consistency and accuracy of their reports.

To help with this, some companies have embraced the use of artificial intelligence, as it improves the efficiency, precision and comprehensiveness of their reporting practices.

How else can artificial intelligence be used to transform ESG reporting?

Making data collection and analysis more effective

The huge volume of data to be managed and analyzed for ESG reporting is a challenge for most companies.  It doesn’t help that sources of data are diverse, ranging from third-party reports and external databases to internal company records. This variety often causes data fragmentation, where important data is scattered across different formats and systems, making it hard to compile and analyze.

By employing the use of artificial intelligence, companies can streamline the process of collecting and analyzing data. Through natural-language processing and machine-learning algorithms, artificial intelligence can also go through huge volumes of data and extract pertinent information.

Further, artificial intelligence can pick out and classify any data points related to ESG from different sources, reducing the effort and time required to conduct manual data entry and analysis.

Picking out trends and patterns

In addition to gathering data, artificial-intelligence algorithms can also pick out trends and patterns more easily from data and in a shorter time than humans. The ability to discover hidden insights affords companies a better understanding of their ESG performance, while also calling attention to areas they need to improve on.

By identifying patterns, companies can also learn more about the underlying drivers of the impact they have on the environment and how they can address any negatives.

Powering predictive analytics

By using advanced algorithms and historical data, artificial intelligence-powered predictive analytics can predict future outcomes on sustainability. This, in turn, empowers businesses to address social and environmental challenges before they become bigger.

Predictive analytics can also aid companies in anticipating possible risks related to ESG factors, which may allow businesses to come up with strategies to capitalize on opportunities and alleviate risks, helping ensure resilience and long-term sustainability.

In addition, it can inform decision-making at both the operational and strategic levels, which will be good for strategic planning. Entities such as Coyuchi Inc. would do themselves a big favor by constantly looking out for better AI tech to help in their ESG efforts.

NOTE TO INVESTORS: The latest news and updates relating to Coyuchi Inc. are available in the company’s newsroom at https://ibn.fm/COYU

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