Nasdaq Sustainable Lens Harnesses Artificial Intelligence to Help Companies Navigate the Complexities of Sustainability and ESG Reporting
By Michael Stiller, New Initiatives, Capital Access Platforms, Nasdaq
Throughout 2023, the areas of sustainability and environmental, social and governance (ESG) have been in the midst of a major evolution. The pressure on companies to deliver transparent and credible disclosures and commitments are seemingly increasing as stakeholders, like customers and investors, ask for more information and regulatory standards come into view. Despite progress in standard-setting this year, companies appear to be confused in the ever-changing market landscape.
To help companies navigate complexity and stakeholders’ asks for greater transparency, Nasdaq is launching Nasdaq Sustainable Lens™, a software-as-a-service (SaaS) based ESG intelligence platform that harnesses the power of generative artificial intelligence (AI).
Nasdaq Sustainable Lens equips sustainability, investor relations, legal and accounting professionals with on-demand, data-driven insights from over 9,000 companies globally—say goodbye to manual research based on limited data sets. The SaaS platform arms companies with an AI-powered ESG assistant to summarize disclosures and answer questions, the ability to search through and access more than 9,000 companies’ documents, access to workflows to benchmark disclosures against standards and an unlimited number of companies, and enterprise-grade AI governance from Nasdaq. Leveraging Sustainable Lens, companies can get one step closer to addressing the growing pressures around sustainability and ESG.
In recently-released Nasdaq research, The State of Sustainability and ESG in 2023, Nasdaq Sustainable Lens’ AI workflows were leveraged to review and analyze documents from approximately 7,200 companies globally. The findings indicated that only 44% of the 7,200 companies analyzed currently provide climate-related disclosures aligned with the Corporate Sustainability Reporting Directive (CSRD), International Sustainability Standards Board’s (ISSB) sustainability and climate-related standards and U.S. Security and Exchange Commission’s (SEC) proposed rules. This compares to 64% of companies analyzed providing disclosures aligned with the CSRD and ISSB standards in business ethics and business conduct (governance) disclosures and 75% of companies proving disclosures aligned with the CSRD and ISSB in human capital (social) disclosures.
As some of these regulatory standards become disclosure requirements in 2024 and beyond, and others might move from proposed to final status in certain jurisdictions, the pressure is on companies to enhance their disclosures.
Leveraging technology to reduce the burdens on companies
The resources required to credibly respond to stakeholders’ questions, meet regulatory demands and understand areas to focus on are significant. While companies have invested in programs, sustainability and ESG are still new disciplines for many companies with small teams. In addition, those teams are largely populated by employees that migrated from other internal teams or voluntarily took on the sustainability and ESG responsibilities on top of an existing role.
Enter AI. Sustainability and ESG disclosures are an ideal AI and language model use case. These disclosures are largely qualitative, unstructured, and dispersed across several documents. Combine that with the fact that humans are reading thousands of pages to identify a best practice sentence or single data point to validate a disclosure in a regulatory document or benchmark their company disclosures against peer disclosures to understand the competitive landscape or guide program priorities. Modern technologies and AI capabilities can help boost productivity and reduce costs for improved efficiency in reporting.
Meet Sustainable Lens, a generative AI ESG intelligence platform
Two powerful trends are colliding. The sustainability and ESG landscapes are evolving simultaneously as AI technology advancements provide teams with newfound productivity gains.
As Nasdaq strives to meet customer demands, we maintain our overarching goal to leverage technology as an enabler – to power economic progress, help humans work smarter and uncover new proprietary data and insights.
We’ve taken another step by creating a generative AI ESG intelligence platform that enables transparency and credibility. Nasdaq Sustainable Lens helps companies make faster decisions using data, power productivity through AI workflows, enable credibility with transparent in-document examples and leverage enterprise-grade AI governance from a trusted innovator in Nasdaq.
To learn more about Nasdaq Sustainable Lens, contact us here.
