Many SMEs are facing the pressing challenge of integrating environmental, social and governance (ESG) factors into business practices to create a more sustainable future. To encourage this, regulatory frameworks such as the Corporate Sustainability Reporting Directive (CSRD) have been introduced. But how can companies effectively and efficiently meet the requirements of these directives?
Nowadays, people are increasingly turning to ChatGPT and the like to save themselves work and complete tasks as quickly as possible. But is it as easy to implement the CSRD, prepare a carbon footprint and other sustainability declarations?
The good news first – artificial intelligence can not only automate processes, but also enable a more precise and comprehensive analysis of ESG data. The bad news is that AI can only ever be seen as a supporting element. There is no way around personal engagement with the generated content.
In this article, we want to take a closer look at how AI is already transforming ESG reporting at Code Gaia and how it will do so in the future.
Table of contents
- Who works on artificial intelligence at Code Gaia?
- How does Code Gaia use artificial intelligence in ESG reporting?
- What plans does Code Gaia have for artificial intelligence in ESG reporting?
- ESG reporting and artificial intelligence: a conclusion
1. who is working on the artificial intelligence at Code Gaia?
It is always important to realize that behind artificial intelligence there are people who train it with their expertise before the technology can finally be used as a supporting element.
At Code Gaia, AI functionality is developed as part of the product right from the start. Dr. Sebastian Beschke, Head of Engineering, with his doctorate in Natural Language Processing and experience from a wide range of data science projects, has exactly the right qualifications to apply the latest technologies precisely to the tasks of sustainability. And the entire, diverse engineering team of software engineers and data scientists is constantly working on improving our AI functions.
He is supported by our Head of Sustainability Phillip Blumenthal, a certified ESG specialist with more than 20 years of experience in environmental, ESG and sustainability management for companies. He is Code Gaia’s expert for technical sustainability issues, including legal regulations, reporting and methodological requirements.
Their expertise ensures not only a smoothly functioning, but also a technically sound technology in the Code Gaia software.
2 How does Code Gaia use artificial intelligence in ESG reporting?
Effective preparation of CO₂ balances
At Code Gaia, we already use artificial intelligence for various functions in ESG reporting. The automated extraction of environmental data from various sources plays a key role. This data is analyzed and categorized by the AI. This allows CO₂ balances to be created quickly and accurately without having to rely on manual data input.
Support in drafting the sustainability statement
Furthermore, our AI supports the report creation process by formulating drafts that match the respective report requirement, taking into account existing information provided by users. This information can either be entered as text, e.g. as a bullet-point summary of the available findings, or as a copy from other documents.
It is also possible to extract the text from the company policies and documents that are uploaded. This is then compared with the requirements of the ESRS disclosures. The result is a draft disclosure that can be edited and finalized for reporting.
The content provided is organized in such a way that it corresponds to the structure of the disclosure requirements. After the written text has been corrected and confirmed, the document can be added as evidence for auditors and insurance companies.
This can save valuable time in summarizing the policies, procedures and documents that have already been drafted.
However, it is very important for us to mention that artificial intelligence can only play a supporting role here. There is no way around checking the accuracy of the report content created by the AI. In the end, the sustainability report must be watertight and stand up to the auditors. Even if it’s no fun – put your entire report through its paces.
3. what plans does Code Gaia have for artificial intelligence in ESG reporting?
Improved data extraction & optimization suggestions
We want to further expand the use of AI in our ESG reporting software. We plan to expand the existing functions, including improved data extraction and the provision of suggestions for optimization based on the data collected. In addition, our AI should be able to interpret queries about the data and make specific optimization recommendations based on the analyzed environmental indicators.
We also want to use artificial intelligence in quality assurance processes to detect incorrect entries and results.
AI as an advisory function
Code Gaia thrives on the exchange with customers. Especially in this rather new and complex area of ESG reporting, we will never use AI as a substitute for personal support. However, we are also planning to use AI as advisory support within the software.
Optimized data collection processes
AI will also play a decisive role in the consolidation of information and data collection processes. For example, it will read web content and advise on possible data sources. Our development team will also be working on robotic process automation (RPA) in the future. RPA refers to the use of AI software to automate repetitive tasks that were previously carried out manually due to large amounts of data, such as maintaining transactions and records.
4 ESG reporting and artificial intelligence: a conclusion
Overall, the field of ESG reporting is on the verge of an exciting transformation through the use of AI. At Code Gaia, we recognize the importance of AI for ESG reporting and are already successfully using it to provide our clients with a holistic and efficient approach.
However, it is important to emphasize that AI can only play a supporting role. Ultimately, the responsibility lies with the users to check the report content created by the AI for accuracy and to ensure that the sustainability report meets the requirements.
Overall, we believe that integrating AI into ESG reporting at Code Gaia not only increases efficiency, but also helps to create a more sustainable future for companies and society as a whole.
Would you like to find out more about our ESG reporting solution? Please feel free to make an appointment.
