16 AI tools re-shaping the ESG and Sustainable Finance landscape

Embracing sustainability has never been more critical, and Artificial Intelligence (AI) is contributing massively to accelerating this change. Here, we present sixteen cutting-edge AI tools that are transforming the Environmental, Social and Governance (ESG) landscape. They generally deliver one of four ESG functions:

1. Investment – as investors seek to build investment portfolios using more than just company financial data, these tools are using data points on ESG topics  to help construct portfolios that align with the investors preferred levels of environmental, social and governance performance criteria. They might suggest the inclusion of companies manufacturing renewable energy over oil and gas companies.
2. Data Management – these tools support companies in assessing their own performance on ESG factors. For example, they may assist in the calculation of greenhouse gas emissions arising from an organisation’s activities, or help companies set and monitor targets for diversity and inclusion;
3. Sustainability Scoring – these tools use AI technologies and heuristics to estimate ESG performance and ratings for companies. These ratings and performance indicators can then be put to a variety of uses, including assessing supply chains, determining companies with whom to do business or to place investments with;
4. Sentiment Analysis – AI and ML tools are being combined with traditional and more recently online and social media-based news material (real-time and historic) for sentiment analysis. For example, the performance of a particular subsidiary company may come to light through an online news source before it is officially communicated within the organisation. These tools help organise and operate information flows at global scale.

Investment

Owl Analytics combines AI and machine learning (ML) with expert human quality control to integrate ESG data into investment strategies.

RepRisk analyses ESG risk using advanced ML algorithms to help organisations and investors make more dynamic investments decisions.

ISS ESG enables investors to make more informed decisions to automate ESG data gathering and analysis.

Ethic creates personalised sustainability investment portfolios using AI.

Data Management

Rio harnesses AI to suggest ways to improve a company’s sustainability performance and help companies meet regulatory requirements.

Equilibrium overlaps AI technology with expert insights to meet a company’s ESG reporting needs, automate tasks, and set carbon emission targets.

Novisto assists with sustainability management to improve insights, ESG reporting benchmarking and monitoring.

IBM Environmental Intelligence Suite is IBM’s AI-powered SaaS that combines weather and climate change geospatial data to improve insights on sustainable finance and investing.

Sustainability Scoring

Clarity AI analyses ESG data from 30,000 companies across 200 countries to estimate a company’s ESG rating.

Signal AI allows organisations to compare their ESG performance against competitors and investors in real-time.

MCSI Provides insights on 2,900 worldwide companies’ ESG ratings, sustainability goals, any contentious behaviour, and investment deterrents.

Covalence ESG Ratings compares a company’s promises with its actual actions to provide true sustainability scoring.

Sentiment Analysis

ESG Analytics leverages an ESG analytics AI engine to deliver sentiment analysis on companies across the world.

SenseFolio ESG Framework utilises NLP and ML to monitor 20,000 companies’ ESG ratings in real-time.

Accern provides a simplified solution to gathering insights from unstructured ESG data.

Symanto analyses thousands of social media posts and other unstructured data sources to measure sentiment around ESG related issues.

Conclusion & risk

These sixteen AI-driven tools can drive ESG investing forwards and aid in the adaption towards ESG regulatory changes today.

Always engage your Data Protection Officer and/or General Counsel for the latest company policy on AI usage.

As with any new technology, AI can pose risks to your business. AI and its use can be regulated. Always engage your Data Protection Officer and/or General Counsel beforehand for the latest company policy on AI usage.

Projective Group & ESG

Although AI tools can get the wheels moving on ESG transformation, manoeuvring the minefield of ESG regulations is a challenge for any organisation. It requires expert care to ensure a smooth transition to ESG reporting and sustainable decision making.

At Projective Group, we offer services that do just that:

• ESG data maturity assessments
• ESG data vendor assessment on the current and emerging vendors in the ESG landscape
• Integration of ESG into sustainable finance processes and investment decision making
• Guidance on all ESG related challenges
• Support for adopting sustainable change
• Machine learning expertise to help you understand your data

Ensuring a smooth transition to ESG reporting and sustainable decision making requires expert care.

For more information on Projective Group’s ESG & Sustainable Finance practice contact Will Thomas at will.thomas@projectivegroup.com.

Disclaimer: Projective Group is not affiliated with any of the tools mentioned in this article. The inclusion of any third-party tool in this article is for informational purposes only and does not imply any endorsement or recommendation.

About Projective Group

Established in 2006, Projective Group is a leading Financial Services change specialist. With deep expertise across practices in Data, Payments, Transformation and Risk & Compliance.

We are recognised within the industry as a complete solutions provider, partnering with clients in Financial Services to provide resolutions that are both holistic and pragmatic.  We have evolved to become a trusted partner for companies that want to thrive and prosper in an ever-changing Financial Services landscape.