The Evolving Role of Artificial Intelligence in ESG Reporting
Written by James Beiny, ESG Manager
As environmental, social and governance (ESG) reporting becomes increasingly mandatory in 2025 and beyond, businesses of all sizes are turning to artificial intelligence (AI) to meet these demands efficiently and accurately. The drive toward structured, reliable ESG data is accelerating, with AI offering a powerful solution to the challenges of compliance and transparency.
AI systems are being adopted to streamline the collection, organisation and analysis of ESG data across organisations. Traditionally, ESG reporting has been labour-intensive, requiring manual data entry from multiple internal and external sources. AI, by contrast, can process vast amounts of information quickly and consistently. Companies using AI for ESG data management have reported up to a 40% reduction in processing time and a 30% increase in report accuracy. These benefits are critical for meeting tight reporting deadlines and ensuring data integrity.
A key strength of AI lies in its ability to continuously monitor data sources. Rather than relying on periodic updates, AI tools can analyse real-time data, ensuring ESG reporting reflects current developments. This continuous monitoring helps organisations respond more quickly to regulatory changes, supply chain risks, or environmental events, all of which are increasingly scrutinised by investors and stakeholders.
However, the use of AI for ESG purposes is not without challenges. One concern is the significant energy consumption required to train and operate AI systems—an irony not lost on companies seeking to reduce their carbon footprint. Additionally, ethical and social considerations must be addressed, including algorithmic bias, privacy concerns, and the risk of unvetted or misleading outputs. These issues can compromise trust and undermine ESG goals if not properly managed.
To address these risks, responsible AI governance is essential. Organisations must implement clear policies and frameworks governing AI use, with human oversight to ensure outputs are accurate and appropriate. Engaging stakeholders in the development and monitoring of these systems is also key to building transparency and trust.
At Ward, driven by our commitment to service excellence, we are actively exploring ways to effectively embed AI across the business. The goal is to drive operational efficiencies and improve the accuracy of reported outcomes. Our 2024 double materiality assessment revealed cybersecurity to be a material topic for the business, with the use and management of AI presenting a strong opportunity for Ward to identify cyber-related risks, but also to enhance the quality of its service offering; for example, the adoption of AI-powered systems in anomaly detection and threat monitoring is seen as essential to safeguarding sensitive data pertaining to the business and its clients.
The integration of AI into ESG reporting offers businesses a powerful tool to streamline data collection, improve accuracy and ensure real-time compliance with evolving regulations. By leveraging AI, companies can enhance transparency and make more informed, data-driven decisions that align with their sustainability goals. By using AI tools in a strictly controlled manner, we are confident that we will be able to drive operational excellence whilst positively contributing to the environment, economy and wider society.
