Can artificial intelligence fix ESG rating shortfalls?

Consistency and standards needed to avoid greenwashing

As environmental, social and governance (ESG) investing has evolved rapidly in recent years, so too has the way asset managers analyse and assign value to ESG factors.

Traditional ESG ratings are increasingly viewed as inadequate, since company-reported data is subject to greenwashing and annual ratings are not timely enough for investment decision-making. In the Information Age, corporations are no longer the sole authors of their own narratives because the internet has given stakeholders in companies a vehicle for distributing information that impacts the market's valuation of companies. Today's superabundance of information calls for a new ESG analytical model built around the application of artificial intelligence. Technology is the only way to asc...