Artificial intelligence (AI) technology has been found to generate value for many firms; however, it also has unintended and undesirable consequences. The reality of AI-related risk has led to the development of AI governance frameworks and calls for greater oversight of the use of AI. The merits of an ESG (environmental, social, governance)-based approach to oversight of AI-related risk are considered in this paper, with a focus on the current trajectory of international sustainability standards development. Despite their differences, AI governance and ESG reporting both seek to address risk in the broadest sense, with proactive and transparent approaches to its management and mitigation. A preliminary set of recommendations for incorporating material AI-related risk into ESG reporting, covering both general or context-setting disclosures and industry-specific disclosures, is provided.
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This article was first published by the Centre for International Governance Innovation on CIGIonline.org.
ABOUT THE AUTHORS:
Mardi Witzel is a board director with 20 years’ experience in not-for profit board governance and currently sits on the CPA Ontario Council. She is focused on AI and ESG and works with NuEnergy.ai providing AI governance expertise to private and public sector organizations.
Niraj Bhargava is the CEO and co-founder of NuEnergy.ai and an expert in AI Governance. He has over 30 years of experience in technology, business creation and leadership. He is currently the Chair of the Innovation Committee of the Board at the Royal Ottawa Mental Health Centre and has been a member of their Board of Trustees for the last five years.