December 8, 2022
Companies should hold their fire when deploying AI to try and manage ESG (Environmental, social, and corporate governance) until the technology matures, said former Al Hilal Bank CEO, Alex Coelho.
Speaking on a panel at the AI Summit New York, Coelho, who is the founder of New York-based Schumpeter Ventures, said companies should currently focus on applying AI in terms of data analytics to monitor and analyze ESG data.
“The ESG wave is upon us,” Coelho said. “Enterprises must have a very clear vision of what (their) ESG framework is. Establish your goals by sensing what your stakeholders expect from you.”
Ade Adedeji, managing director of ESG advisory for commercial products at U.S. Bank, also spoke on the panel. Adedeji said the 2020 death of George Floyd helped advance such conversations not only from the consumer perspective but from the investment community.
But Adedeji said the biggest challenge around ESG today is unearthing whether everyone is “seeing the same thing.” For example, he said that social issues in the U.S. may be viewed in a different light elsewhere in the world.
To ensure an organization’s ESG can handle a negative instance, he said companies should ensure they’re rapidly able to sort through data to mitigate such circumstances. ESG reporting, where companies have to disclose data covering business operations related to their environmental, social and governance aspects, may soon be a mandatory requirement. Legislation in multiple jurisdictions to put such rules into place is slowly gaining traction. Such data screen capabilities would be needed to stop companies from falling foul of the new rules.
Moderating the panel was Kevin Kwok, a sustainability advisor at Omao Brands. Having previously headed HSBC's ESG advisory in Americas capital financing and investment banking division, Kwok said asset managers are looking for sustainability and climate experts as part of their investment process on company boards and executive-level committees.
And in terms of board representation, Kwok added that company boards are becoming more diverse as increased diversity offers different perspectives – “and it’s not just about gender, but other underrepresented minority groups.”
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