Artificial intelligence offers ‘huge untapped potential’ for businesses seeking to optimise their ESG reporting, Danish trade union organisation Djøf has said.
According to Djøf’s independent ESG panel, which comprised 50 ESG experts from across the Danish business sector, AI can be ‘key’ to improving CSRD reporting, as well as strengthening data quality and helping companies navigate complex sustainability requirements.
At the same time, however, the panel notes that the high energy consumption required by AI ‘may risk undermining’ businesses’ stated climate goals.
‘Well thought-out implementation’
“AI can revolutionise the work with ESG reporting by automating processes and giving companies a better basis for decision-making,” commented Lene Bjørn Serpa, head of sustainability at AP Møller Mærsk and chair of Djøf’s ESG panel (pictured).
“But we must not ignore the downside of the technology – its significant energy consumption and ethical challenges. This requires that company management takes the lead with a responsible and well-thought-out implementation.”
According to the study, most Danish firms are not yet mature enough to exploit the full potential of AI in ESG reporting, with the panel suggesting that only a third of businesses are ready to implement digital solutions for this purpose.
In addition, implementing AI effectively in ESG reporting will require additional knowledge sets and/or strategic recruitment, to enable firms to maximise its potential, Djøf noted.
‘Commercially meaningful’
“AI can streamline decision-making in the form of interconnected data and strengthened monitoring of ESG goals, and this can be of help to those who, for example, will have to report on CSRD from this year,” commented Anne Waagstein, chairman of Djøf Privat and member of the ESG panel. “But it requires people to ensure that the technology is used in a commercially meaningful and ethically sound manner.
“Skills development of employees is absolutely essential if companies are to reap the benefits of AI in their ESG efforts.”
The report suggests seven specific recommendations for companies that want to use AI in their ESG work, including launching pilot projects, setting clear goals and prioritising skills development among employees. Read more here and here.
