Global and EU experts  discussed the impact of large-scale adoption of artificial intelligence on ESG priorities and ethical issues to consider in navigating this journey at recent joint ACCA-EY event, attended by over 300 participants

The data explosion we’ve witnessed over the past several years, coupled with increasing processing power and growing access to ‘smart’ technologies, have generated considerable enthusiasm about the transformative power of AI to accelerate the green transition. At national, EU and global level, political and regulatory action is shaping to channel the potential of AI towards the goals of the European Green Deal and UN SDGs. Sustainability standards and regulations continue to evolve, digital technologies like AI offer new ways to understand, track and improve performance – whether that’s using AI to collect and track ESG data, optimize business operations or validate the ESG performance of potential investments.

But the introduction of these technologies is not without risks, and managing the use of AI in an ethical and responsible manner is essential if we are to create sustainable societal value from it. Legitimate ethical questions arise across a broad spectrum of topics, such as the environmental impact of data centers and supporting infrastructure, uneven access to technologies, potential hard-wiring of biases and risks of reduced human oversight in complex tradeoff decisions. So is AI an answer or solution to ESG? Or is it part of the problem and how can we make it net positive?

These questions were  the focus of a lively panel discussion jointly organised by ACCA (the Association of Chartered Certified Accountants)  and EY, which  explored the opportunities and risks presented by the use of AI; how public-private partnerships and regulatory policy decisions can accelerate the realization of the European Green Deal and UN Sustainable Development Goals; and what ethical issues we must consider in navigating this journey.

Narayanan Vaidyanathan, head of Business Insights at ACCA opened the discussions : ‘ As highlighted by ACCA’s recent report Ethics for sustainable AI adoption: connecting AI and ESG, accountancy and finance professionals have a key role to ensure that AI adoption happens in an ethical manner, that will yield equitably distributed sustainable long-term benefits. With its explicit and long-standing commitment to ethical practices, the accountancy profession is well placed to guide organisations along a responsible path for AI adoption, through several actions: Setting tone at the top on AI adoption; delivering sustainable value; exercising professional judgement; challenging greenwashing; complying with AI regulation and ethics policies; Prioritising data management; adopting a strategic approach to oversight and delivery; understanding vendor landscape, and finally building knowledge and skills.

Monica Dimitracopoulos Global Long-Term Value Leader at EY said: ‘We are at an inflection point with respect to the capacity of AI and related digital technologies to help us address pressing environmental, social, and business challenges. As sustainability standards continue to evolve, digital technologies offer new ways to understand, track and improve ESG performance – whether that’s using AI to collect and monitor data, optimize and de-risk business operations or validate the true environmental footprint of potential investments. According to EY’s 2021 Global Institutional Investor Survey, technology and data innovation are becoming increasingly important for both the companies issuing ESG data and for investors consuming those insights. We now face an historic opportunity – working across the public and private sectors, we can identify concrete actions that can help us navigate the ‘twin green and digital transitions’ in a way that creates value for this and future generations’.

The panelists, Maikki Sipinen, from the European Commission’s  Artificial Intelligence Policy Development and Coordination unit; Marianne Haarh, from the Green Digital Finance Alliance  and Christine Chow, from HSBC Asset Management were also invited to share their views on the main adverse ESG impacts that should be considered as we move forward with broad-based adoption of these technologies,  the role that policy makers and regulators can play, and on how companies can mitigate  broad ethical and governance risks, including  reputational risks from mishandling AI. At EU level, the 2021 Coordinated Plan on Artificial Intelligence (AI) is the next step in creating EU global leadership in trustworthy AI, and includes  a strategic focus area  on ‘AI for climate and environment’.

Eva Kaili, MEP and Chair of the Panel for the Future of Science and Technology (STOA) at the European Parliament added:  ‘As we talk about human centric and trustworthy AI, our role is also to understand the challenges of AI systems and the principles that should guide their use – sustainability being one of them. It's really important to recognise that algorithms are only as good as the humans who created them. So if we want to have AI-informed decisions, we have to ensure AI systems do not embed our biases and our failures – we definitely need to test them, as highlighted in recent STOA research. We need sandboxes and we have to protect our data, including biometrics. We have to decide that in Europe we want to lead with quality. We do invite input on the legislation in the making, your voice is needed in the debate!

Brando Benifei, MEP, Member of the Special Committee on Artificial Intelligence in a Digital Age (AIDA), and European Parliament AI Regulation Rapporteur: ‘ EP special Committee AIDA,  after having studied the various applications of AI and the way we can strengthen a sustainable human centric adoption of AI in the EU,  is going to conclude its work in a few months with a report and we are now starting the more substantial work on the new AI regulation, for which I’ve been appointed co-rapporteur. The sustainability, ethical and ESG dimensions of AI uptake, including the prohibition for social scoring, the prohibition of mass surveillance in real time through biometric data, but also ecological transition, and social inclusion will be contentious issues. We will have to work together on this very complex file to make sure AI can contribute to these objectives and not to be used at their detriment.’ 

Andrew Hobbs, EMEIA Public Policy Leader, EY concluded: ‘Discussions clearly showed  that understanding of AI is not just for “techies”, it's for everyone in an organization. So teamwork is absolutely critical both within the organization and the ecosystem to get the use of AI right - the use of AI in organisations needs to be done transparently with the workforce to build confidence.  And it’s equally important to work all together- policy and decision makers, finance professionals and accountants, industry, etc. As highlighted by the European Commission, the Public sector can also lead the way in sustainable adoption by utilizing their remarkable purchasing power’.

Ends

About ACCA

For media enquiries, contact: Cecile Bonino Liti; cecile.bonino-liti@accaglobal.com ; Mob: +32 (0) 493 29 17 66
www.accaglobal.com; @ACCAViews

ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 233,000 members and 536,000 future members based in 178 countries and regions that upholds the highest professional and ethical values.

We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.

Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.

Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.