Companies Turn to AI to Meet New ESG Disclosure Rules, But Tools Come with Tradeoffs
• New regulations requiring companies to disclose environmental and social risks are driving demand for AI tools to track ESG metrics.
• AI can help in areas like calculating emissions, improving data accuracy, and predictive modeling. But companies need to weigh risks and energy use.
• Monitoring vehicle fleet efficiency with AI can reveal sustainability opportunities and prevent costly electrification mistakes.
• Generative AI tools like large language models risk high carbon footprints and need governance.
• While regulations mandate disclosure, the real impact will come from using AI-enabled software to reduce environmental footprints.