The ESG Implications of AI Technology

The rise of AI technology in the past few years has led to some important conversations regarding ethical, social, and governance (ESG) challenges. According to statistics, the global AI market is slated to grow 37% every year between 2023 and 2030, taking over processes in every sector, from banking to healthcare. With this significant rise in the implementation of AI, the way we approach matters of ethics, environmental impact, social inclusion, governance, and accountability must be considered. 

ESG has emerged as a fundamental consideration for businesses in recent years. With talk of sustainability, social responsibility, and ethical business processes increasing amid concerns about climate change, social change, and The Great Resignation, it makes sense to include ESG considerations when talking about the rise of AI. After all, artificial intelligence may just be one of the biggest change-makers in business today. 

Ethical considerations of AI 

Much has been said about the ethics of AI in the last year, especially with the SAG-AFTRA/WGA strikes pushing the issue of AI use to the forefront. Writers and creatives have raised understandable concerns about their jobs being taken over by AI and the implications of such a move. As AI becomes more intuitive, many have expressed worry about the ethical use of AI and how it could negatively impact business and especially creativity. 

Businesses that are open to the use of AI must consider the ethical implications of how AI is applied. For example, one use of AI has been in generating content quickly and efficiently, but this content generation has also led to claims of plagiarism or even misinformation. AI is only as good as the information it is being fed, meaning human interaction is still required to ensure that the information disseminated by AI is correct. 

Bias is also interwoven into current AI systems. Because humans can be inherently biased, it stands to reason that the AI being implemented in hiring, training, and decision-making would also be biased. Biases within AI must be identified and eradicated as much as possible to be more ethical in AI use moving forward. 

The environmental impact of AI

The environmental impact of AI technology has been a concern since the expansion of its widespread use. An increasing number of businesses are pledging to be as sustainable as possible. 

However, this pledge may be negatively impacted by the rise of AI. According to studies, the information and communications technology sector is slated to reach 14% of global emissions by 2040. Much of this is due to the creation and training of cutting-edge AI systems. 

If companies wish to operate sustainably but still use AI within their processes, there must be an increase in transparency from the operating bodies training AI systems. There also needs to be an increase in oversight — even from the top levels of government — on the use of AI to keep tabs on its increased impact on the environment. 

As AI use grows in popularity, innovations will emerge that allow for more sustainable hardware and processes in training and implementing AI. It will be up to businesses to do their due diligence when choosing what AI to use and deciding what environmental impact that AI will create. 

The social impact of AI

We have already witnessed the social impact of AI, and as AI grows in use and ability, the social impact will be felt on a wider scale. AI has made many jobs easier and more accessible. It has also created new jobs as there needs to be people to maintain and train AI systems. 

There has also been concern that AI will eliminate some jobs — including entire industries — altogether as it grows in adoption. According to studies, upwards of 14% of workers have already experienced some level of job displacement due to AI technology. 

Other social considerations with AI use include the aforementioned bias problems with AI implementation, as well as the heavy impact on creative expression and the spread of misinformation. 

Governance and accountability 

Many people already involved in the creation, training, and implementation of AI systems believe in strong governance and accountability for the systems going forward. The risks and challenges associated with AI, especially within the ESG realm, will require swift action by governing bodies to quell negative impact. The Biden Administration has already issued an Executive Order concerning AI usage, showing that the federal government has its eye on keeping the leaders in the AI space accountable. 

Going forward, ESG considerations must be kept at the forefront of AI innovation. AI is here to stay, and its impact is bound to be felt globally. By remaining mindful of ESG within businesses and technology moving forward, we can ensure that the impact felt by AI will be more positive than negative.