Although most businesses have the best intentions, that will not matter in the end unless substantial and demonstrable improvements are made. This starts with setting aggressive, impactful ESG goals. But developing ESG goals and then monitoring and making progress towards them is among the greatest challenges faced by global businesses today. The incoming data sources are complex and divided, leading to insufficient analyses, inconsistent reporting, and unfulfilled promises.

This is where artificial intelligence (AI) can be a game changer for managing ESG efforts and, ultimately, addressing climate change. AI can help move the needle in the right direction by providing comprehensive ESG management solutions, reporting capabilities, and actionable emissions insights for even the biggest enterprise.

Over the past two years, an increasing number of governmental bodies around the globe have enacted laws requiring corporations to report ESG metrics. In 2021, the European Commission adopted a proposal that will require companies to report on social and environmental impacts starting in 2024. The United Kingdom, Hong Kong, Singapore, and China have all updated their environmental and social disclosure guidance. And in August 2022, the US Securities and Exchange Commission proposed regulations to enhance and standardize climate-related disclosures.

But right now, most corporations are not yet prepared to meet these new requirements. They need automated solutions that integrate data and provide the full scope of emissions-tracking features and broader ESG performance management. AI is a big part of such a solution.

AI-powered solutions provide near real-time data fusion, validation and mapping to current standards and frameworks. For systems infused with AI, reporting is no longer a burden, and we can ensure the correct metrics are tracked. This includes Scope 1, 2, and 3 emissions, the last of which is notoriously difficult to track. This does require greater data collection and processing — mostly to track Scope 3 emissions — including the initial training for an AI model. However, once trained, the AI operates as inference that requires minimal computing resources.

And results show that corporations can make a difference simply by adopting a comprehensive tracking system. Those with automated solutions for emissions measurements are 2.2 times more likely to measure emissions comprehensively and 1.9 times more likely to reduce emissions in line with their ambitions.

It’s increasingly clear that consumers and investors are becoming wise to greenwashing and false promises, while organizations are still struggling to implement sustainability solutions that provide meaningful climate action. The need to do so is urgent, for both the planet and to satisfy stakeholders. In research from PwC, almost half of investors surveyed expressed a willingness to divest from companies that aren’t taking sufficient action on ESG issues. The demand to succeed is not only external. Recruiters have also noticed that more and more employees favour companies with clear ESG commitments.

Initiatives that provide serious improvement for standardizing and delivering on ESG metrics can be delivered by AI solutions. This extends from ongoing operations all the way to reporting ESG outcomes. For example, AI-based predictive maintenance is how companies like Shell are delivering cleaner, safer, and more sustainable energy from existing assets as well as new renewable assets like wind farms. Shell’s investments improve the bottom line and the company’s impact on climate change.

Investing in these types of AI solutions isn’t just for tracking ESG metrics against goals. It is also about improving overall efficiency within the business, including improving supply chain logistics, demand forecasting, and optimizing sourcing and planning workflows — all of which can reduce emissions and a corporation’s impact on the climate.

The success of reaching any goal is limited by the target. And when that goal will be scrutinized by investors, customers, and employees — not to mention decide the future of our planet — choosing the right target is critical. We are past the point where companies can set incremental targets in response to growing global ESG pressures. For too long, organizations have been setting ESG goals without taking seriously the importance and challenge of making true, sustained progress.