Today, financial managers are increasingly faced with challenges in managing ESG data. However, the recent rise of artificial intelligence has raised awareness of the importance of AI for ESG maybe.
That’s why EY’s latest Global Corporate Reporting Survey showed that finance leaders are deeply concerned about the integrity and reliability of data contained in corporate reports. This ESG survey also shows how these financial leaders highlight the urgent need for advanced solutions such as AI for ESG.
Lack of reliability of ESG data
96% of global CFOs are concerned about the integrity of their organization’s non-financial data: nearly 39% cited inconsistencies in data format, while 35% are concerned about data unreliability.
The problem of a few missing lines in each document is not trivial. That’s why half of finance leaders recognize that inaccurate or poorly managed data can lead to missed sustainability goals. Therefore, a ESG tool can be used to streamline the ESG reporting process.
ESG survey shows that only 47% of CFOs and 53% of investors believe that most companies are on track to achieve their goals. 69% of finance leaders report a notable increase in investor requests for non-financial performance.
Myles Corson, EY Global and Americas Strategy and Markets Leader (Financial Accounting Advisory Services), said: “The task of guiding an organization through short-term volatility while Keeping a firm grip on long-term growth relies largely on the ability of the finance function. effective use of data to build a clear picture of plans and future prospects. But it is clear that there are significant concerns among CFOs and the investment community around data transparency and non-financial information, which they cannot afford to ignore.
AI: a game-changer for ESG data integrity and reporting standards
As ESG regulations tighten, 78% of investors are beginning to believe the new standard will have a positive impact on sustainability disclosures. However, 55% are concerned about the cost of compliance, while 44% are concerned about the complexity of these regulations.
It’s there AI in finance comes into play. It can be used to manage huge data sets more efficiently, automate compliance processes, and ultimately reduce operational costs. This EY ESG survey also showed that more than half of investors (57%) view AI as a tool to ensure data accuracy.
Related articles: Investor Confidence in Sustainability Data: Key Takeaways from Global Study | The role of governments in regulating and using AI for the SDGs
Overcoming the challenges of adopting AI to ESG reporting
There is no doubt that the potential of AI is there, but not all companies are ready to embrace it yet. According to the EY survey, for example, 43% of finance leaders are enthusiastic about integrating AI into their processes, while 29% remain cautious due to uncertainties surrounding regulation.
However, companies that adopt AI for ESG can achieve significant rewards, especially in data analysis and reporting. For businesses looking to improve their ESG reporting abilities, IMPAKTER PRO is an AI-powered solution that simplifies the complexities of ESG reporting.
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This article is referenced from Global financial leaders turn to AI to solve ESG data challenges, EY survey finds by ESG News
Editor’s note: The opinions expressed here by the authors are their own and not those of impakter.com. — Cover photo credit: Adéolu Eletu