Six tips to unlocking AI's potential in your ESG strategy

From planning a wedding to combating climate change to tailoring medical treatments based on DNA, AI is becoming increasingly present across much of our lives. However, many organisations are not yet tapping into the transformative potential that AI has to offer when it comes to planning and executing an effective Environmental, Social and Governance strategy (ESG).  

Perfectly positioned at the intersection of sustainability and corporate strategy, savvy businesses are increasingly using AI to expedite their sustainability initiatives, from creating an initial strategy document to helping with governance and compliance to aiding recruitment and training efforts.  

Below are six ways you can use AI within your ESG strategy, today:  

Ease the burden of data gathering and reporting. Even for the most basic ESG strategy, manual data gathering is a daunting task involving numerous bills, papers, and spreadsheets.  

Instead, AI tools can integrate with accounting systems or data storage repositories to retrieve necessary insights for calculating carbon footprints and more. By consolidating disparate data sources, AI ensures consistency in reporting, while significantly reducing the risk of human error.  

Beyond that, AI can use this data to conduct predictive analytics to forecast future risks, opportunities and the potential impact of climate change and social trends on your organisation, as well as predicting the direction your ESG strategy should take.  

A launchpad for policy and procedure documents. As businesses face increasing pressure for ESG transparency and raised expectations from employees, especially Gen Z, for ethical and responsible corporate behaviour, internal and external ESG policies and procedures need to be in place.  

Generative AI can help write a basic ESG strategy, summarise regulatory requirements, and outline procedures for achieving standards such as Scope 1 or ISO14001, for example. While the documents will not be perfect, they will provide a strong starting point from which more in-depth and tailored policies for your business can be developed to align with your specific objectives and values.  

Check laws and legislation for compliance. Navigating ESG laws and compliance can be a complex and thankless task. AI already plays a pivotal role in helping businesses quickly and efficiently identify documents for achieving compliance. Generative AI can identify and align the laws and regulations that are relevant to your business.  

AI tools can assist by identifying the relevant documents to prove compliance, discovering if your existing documentation is compliant with the myriad of standards and regulations out there or highlighting gaps where new or alternative documents or policies are required.  

Enhance energy and waste management. Beyond playing a strategic role, AI is fast becoming foundational for execution. By delving into building and equipment data, AI can significantly improve energy management, pinpointing opportunities for efficiency enhancements. This includes suggesting upgrades, retrofits, and behavioural adjustments to curb energy consumption and costs.  

For example, when integrated with IoT devices, AI can monitor everything from industrial waste to office and data centre energy usage, down to paper levels in bins. Smart buildings, equipped with numerous IoT devices, collect data on various aspects like optimised fridges, water usage and smart HVAC systems. Recent reports highlight DeepMind's AI research, indicating a potential 13% reduction in energy usage through HVAC systems. 

In addition, AI helps in predictive maintenance by using sensor and equipment data to anticipate potential failures or inefficiencies within systems and devices. It also optimises energy-intensive processes such as lighting and cooling by analysing real-time data and adjusting parameters accordingly. And, AI assists in understanding and analysing office space utilisation patterns, minimising energy consumption, vital with today’s hybrid working patterns.   

Overcome bias and expedite recruitment. There have been several high-profile failures of companies using AI to help recruitment, the most famous being in 2018 when Amazon found that its recruitment tool had a bias against recruiting women. However, while historical tales of recruitment bias should be considered, today’s AI has become a useful tool for helping organisations fight gender, age, racial and sexual discrimination and correct potential human bias. Unilever, for example, is using AI recruitment tools to analyse and screen candidates' CVs to ensure a more inclusive workforce.  

Fast-track ESG training. One of the biggest challenges with ESG, especially in small businesses is finding someone with the knowledge and understanding to hit the ground running with your strategy. Hiring someone with these skills is costly. Training someone from scratch is time-consuming.  

AI can help by providing direction for training, creating a syllabus of content for required reading and providing an environmental audit of all documentation in your organisation. Through AI-guided training, individuals can gain a comprehensive understanding of ESG principles and identify risks related to operational and governance issues within their organisation. AI can also devise tests to ensure knowledge is complete and thorough.  

AI is not going to deliver a ready-made ESG strategy and then execute it flawlessly. Nor is it the panacea to all our sustainability and social problems for a host of reasons, not least of which is that the tech itself is resource-intensive in manufacturing and power. The International Energy Agency projects that global data centres’ electricity consumption in 2026 will be double that of 2022 – 1,000 terawatts, roughly equivalent to Japan’s current total consumption, according to the Yale School of Environment.  

However, AI’s transformative potential in driving ESG initiatives forward is undeniable. It enables organisations to boost efficiency (both human and technological), optimise energy management processes, reduce costs, and minimise environmental impact, while simultaneously helping businesses manage bias and recruitment fairly.   

AI is like sat nav – it needs to be used advisedly and you need to know in what direction you want to go – but it provides an effective springboard to kickstart or propel your efforts along your ESG journey that can be maximised immediately.