Harnessing artificial intelligence for enhanced environmental, social, and governance reporting: A new paradigm in corporate transparency

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This article examines the transformative potential of artificial intelligence (AI) in enhancing environmental, social, and governance (ESG) reporting within corporate governance. AI can revolutionize traditional ESG reporting by automating data collection, ensuring accuracy, and enabling real-time processing and predictive analytics. This integration supports a comprehensive, timely, and proactive approach to sustainability reporting, meeting the rising demands for transparency and accountability from stakeholders and regulators. Key benefits of AI in ESG reporting include improved decision-making through better data quality, predictive insights into sustainability practices, and enhanced stakeholder engagement via dynamic reporting formats. However, challenges such as technical barriers, ethical concerns, privacy issues, and regulatory complexities need to be addressed. The article recommends developing robust data governance frameworks, adopting ethical AI practices, and formulating supportive regulatory policies to overcome these challenges. By doing so, companies can fully leverage AI to achieve better sustainability outcomes and more effective corporate governance.

Keywords: Artificial Intelligence, ESG Reporting, Corporate Governance, Sustainability, Predictive Analytics

JEL Classification: C88, G34, M14, O33, Q56

Received: 15.05.2024
Accepted: 22.05.2024

How to cite: Correia, A., & Água, P. B. (2024). Harnessing artificial intelligence for enhanced environmental, social, and governance reporting: A new paradigm in corporate transparency. In Ž. Stankevičiūtė, A. Kostyuk, M. Venuti, & P. Ulrich (Eds.), Corporate governance: Research and advanced practices (pp. 92–98). Virtus Interpress. https://doi.org/10.22495/cgrapp15