Generative AI can help companies achieve ESG goals by translating sustainability data, automating compliance and improving collaboration.
Companies are increasingly using generative AI to meet environmental goals and complex ESG reporting requirements, Cognizant says. The technology helps translate sustainability data into concrete business insights and plays a role in improving internal collaboration. The insight puts (generative) AI in a different light, as the explosion in the popularity of the technology has been rather accompanied by concerns around sustainability.
About the gap with AI
Many companies experience obstacles in integrating ESG strategies because departments such as procurement, IT and manufacturing often operate separately from one another. Generative AI can bridge this gap by making data accessible to the entire organization. So notes Gregory Verlinden, Associate Vice President of Analytics & AI at Cognizant.
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“Generative AI allows us to not only make data insightful, but to make it accessible to everyone in the organization,” Verlinden said. “That means decisions can be made faster and based on up-to-date information.”
The technology supports not only data collection, but also monitoring anomalies and predicting trends. This allows companies to adapt their sustainability strategies more efficiently to market dynamics. According to Cognizant experts, this helps make ESG goals not only measurable, but also more achievable.
New needs with CSRD
With new regulations such as the Corporate Sustainability Reporting Directive (CSRD), the need to share detailed sustainability information is growing. Generative AI can automate compliance processes, reducing workload and reducing the risk of errors.
“At Cognizant, we see that AI can play a strategic role in establishing and maintaining ESG reporting systems. This is not only about compliance, but also about how companies can differentiate themselves by being proactive about sustainability,” Verlinden said.
In addition, AI provides insights that can prevent miscommunication between departments. Translating data into concrete financial and operational benefits makes it easier to build support for sustainable initiatives. Examples include cost-benefit analyses of sustainable investments and predictive analyses of future sustainability challenges.
Future Prospect
Generative AI looks set to play a key role in achieving ESG goals. It enables companies to better understand and align their sustainability efforts with strategic business goals. Whether it’s regulatory compliance or insight into sustainability measures, companies deploying this technology can respond more quickly to changing market conditions, according to Cognizant. This then requires that generative AI itself be treated in a sustainable manner.