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Volume 2: Artificial Intelligence

11 Oct 2024

Inside this volume:
Industry updates
Longer article on AI and ESG
Media Recommendations

Artificial Intelligence

Industry updates: 

BP Scraps Oil and Gas Production Cut Target for 2030 

BP has shifted its strategy, abandoning its target to reduce oil and gas production by 2030. BP is refocusing on its hydrocarbon (fossil fuel) business to boost investor returns, with new investments in the U.S. Gulf of Mexico and Iraq’s Majnoon field. Despite this shift, BP remains committed to achieving net-zero emissions by 2050. This reflects an industry trend of prioritizing short-term financial gains over long-term transition goals. BP will officially announce these updates in February 2025.  


TotalEnergies Appeals Greenwashing Ruling in South Africa  

TotalEnergies is appealing a South African Advertising Regulatory Board ruling that found it’s "sustainable development" claims misleading. The company faced criticism for partnering with SANParks on environmental protection while continuing oil and gas investments, raising greenwashing concerns. TotalEnergies argues its projects align with sustainability goals, citing significant renewable energy investments. The appeal's outcome could set a crucial precedent for how energy companies market their environmental initiatives.  


UK Commits £21.7 Billion to Carbon Capture  

The UK government has pledged £21.7 billion over 25 years to support carbon capture and storage (CCS) projects, aiming to reduce emissions, create 4,000 jobs, and attract £8 billion in private investment. However, delays and rising costs have cut the original CO2 capture target from 20-30 million tons to 3 million across three projects. Despite this, Keir Starmer highlighted the initiative's economic and job creation potential, though environmental groups remain sceptical.  


ESG Reporting Software Startup Atlas Metrics Raises €12.2 Million  

Atlas Metrics, a Berlin-based ESG data management startup, has raised €12.2 million in Series A funding to expand its team, enter new markets, and enhance its ESG compliance software. The company helps mid-sized firms and financial institutions automate ESG reporting to meet regulations like the EU’s CSRD. CEO Wladimir Nikoluk highlighted the importance of simplifying ESG compliance and leveraging sustainability data for competitive advantage. The funding was led by MMC Ventures, with participation from Cherry Ventures, b2venture, and Redstone.  


Italy Investigates Shein’s Greenwashing Claims  

The Italian Competition Authority is investigating Shein’s operator, Infinite Styles Services Co, over potentially misleading environmental claims on its website. The probe focuses on vague sustainability statements in sections like “#SHEINTHEKNOW” and “evoluSHEIN,” which may mislead consumers about the environmental impact of its clothing. This comes amid EU efforts to combat greenwashing, requiring companies to back up environmental claims. Shein has pledged cooperation with Italian authorities while affirming its commitment to transparency and compliance.  


Longer Article: 

AI and ESG: Transforming the Future of Sustainable Practices 

It seems like all anyone talks about nowadays is how AI is going to take over the world. The strange part? That reality isn’t far off. The pace of change in AI’s capabilities is staggering. While AI can seem daunting and come with its downsides, it also holds immense potential to enable a sustainable future. Companies in the Big 4 are already leveraging AI to enhance data collection, improve reporting accuracy, and identify opportunities to reduce environmental impact, making the transition to sustainability more efficient for their clients.  


However, with our increasing reliance on AI, questions arise about its long-term impacts on sustainability efforts. What will this reliance mean in the future? Fear not—because we’re about to walk you through how AI is being used in sustainability today, and what its future implications might be. 


It seems like all anyone talks about nowadays is how AI is going to take over the world. The strange part? That reality isn't far off. The pace of change in AI's capabilities is staggering. While AI can seem daunting and come with its downsides, it also holds immense potential to enable a sustainable future. As companies worldwide grapple with the complexities of Environmental, Social, and Governance (ESG) reporting and implementation, AI promises to revolutionize how businesses approach sustainability. 

 

However, with our increasing reliance on AI, questions arise about its long-term impacts on sustainability efforts. What will this reliance mean in the future? To answer this, we need to examine how AI is being used in sustainability today, and what its future implications might be. 

 

The potential for AI to positively impact ESG initiatives is significant. In the energy sector, AI is reshaping the global landscape, playing a pivotal role in optimizing how we generate, distribute, and consume energy. AI-driven systems can enhance real-time decision-making and forecasting, allowing for precise placement of wind turbines and solar panels to maximize efficiency. Moreover, smart energy grids powered by AI can balance fluctuating supply and demand, reducing the risk of blackouts and ensuring a stable energy supply. 

 

In agriculture, AI is offering solutions to some of the industry's most pressing sustainability challenges. Advanced robotic systems equipped with computer vision are revolutionizing farming practices. These AI-powered robots can detect and target individual weeds, potentially reducing herbicide use by up to 80% and cutting costs by as much as 90%. This precision approach not only increases yields but also protects soil integrity, offering a promising path forward for sustainable food production. 

 

The financial sector, too, is experiencing an AI-driven revolution in ESG investing. AI models using natural language processing and sentiment analysis can sift through unstructured data—social media posts, news articles, and corporate communications—to uncover insights into a firm's true ESG performance. This capability helps investors make more informed decisions, aligning their portfolios with both their values and financial goals. 

 

However, the integration of AI into ESG practices is not without its challenges. The environmental cost of AI itself is a significant concern. Training AI models demands substantial computational power, resulting in high energy consumption and a sizable carbon footprint. Additionally, the production of AI hardware relies on rare earth minerals, the extraction of which often involves environmentally destructive practices and ethical issues. 

 

There are also social implications to consider. Without intentional strategies, AI adoption could exacerbate existing inequalities, particularly across gender, socioeconomic, and geographic lines. Furthermore, AI models are only as unbiased as the data they're trained on. If biases are embedded in training datasets, AI systems can perpetuate these biases, leading to skewed decision-making in areas such as hiring or resource allocation. 

 

As we navigate this complex landscape, it's crucial to remember that AI is a tool, not a ‘silver bullet’ solution. Its effectiveness in advancing ESG goals will depend on how responsibly and thoughtfully it is deployed. Companies leveraging AI for sustainability must carefully weigh its benefits against its environmental and social costs. 

 

The integration of AI into ESG practices represents more than just a technological advancement—it's a critical juncture in our global journey toward sustainability. As we move forward, we must grapple with a fundamental question: How can we harness the power of AI to drive genuine sustainability progress while mitigating its potential negative impacts? 

 

The answer to this question will shape not only the future of corporate sustainability but also the role of technology in addressing our most pressing global challenges. As stakeholders in this shared future, we must remain vigilant, critically assessing the impacts of AI in ESG and ensuring that our pursuit of technological solutions aligns with our broader sustainability goals. After all, the future of our planet is too important to leave to algorithms alone. 

 

Sources used atm:  

https://link.springer.com/article/10.1007/s10311-023-01617-y#Fig2 

https://www.lse.ac.uk/granthaminstitute/explainers/what-are-critical-minerals-and-what-is-their-significance-for-climate-change-action/ 

https://www3.weforum.org/docs/WEF_Harnessing_AI_to_accelerate_the_Energy_Transition_2021.pdf 

https://assets.ey.com/content/dam/ey-sites/ey-com/en_ca/topics/ai/ey-artificial-intelligence-esg-stakes-discussion-paper.pdf 

Media Recommendations:


Sustainalytics: 

I have only recently discovered this twitter account Sustainalytics, but it’s an endless source of useful information. They keep me up to date with all of the most relevant ESG news, providing a short tweet about an article, podcast or video and then providing the link. This has allowed me to delve into topics around the politics of ESG and risks on portfolio management in a matter of seconds!  

David 8/10 

FT Instagram 

This has been the easiest way to stay on top of global news! I tend to waste too much time on IG anyway, and this is a super way to inject some useful info into a feed that would usually be full of brainrot. I would highly recommend taking some time to subscribe and then the news from the FT will just filter into your feed.  

David 9/10 


Johnny Harris YT 

This may be a bit of a rogue recommendation, but Johnny Harris, an independent video journalist on YT, has possibly produced some of the most interesting content I've seen! His channel isn’t specifically focused on ESG issues but instead covers a super wide range of stories from social problems such as gerrymandering to updates on the war in the Middle East. He does often take sides in a somewhat biased way, and should sometimes be taken with a pinch of salt. I’ve really enjoyed his videos in the past and would highly recommend his stuff. Some fun videos have been “The Real Reason McDonald’s Ice Cream Machines Are Always Broken” and “NFTs, explained”. Go check him out! 

http://www.youtube.com/@johnnyharris 

David 8/10 

 

 

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