The Corporate Sustainability Reporting Directive (CSRD) has brought about a strict requirement for organizations in the European Union and beyond to report the carbon footprint of their supply and value chains. Failing to comply with these regulations not only leads to hefty fines but also poses a risk of reputational damage. To help companies track their emission reductions accurately, artificial intelligence (AI) and generative AI have emerged as powerful tools.
AI and generative AI models are trained on large volumes of raw data to learn patterns and structures of language. They can then be fine-tuned for specific tasks or domains, making them versatile and capable of performing tasks with minimal training or supervision. These models can play a significant role in achieving decarbonization goals.
One way businesses can utilize AI and generative AI is by streamlining reporting and increasing accuracy. Manual calculation of carbon emission data is error-prone, expensive, and can result in an unreliable audit trail. Companies can implement specialized software platforms backed by AI to automate and streamline the process of capturing and calculating emissions data. This not only makes reporting easier but also enhances reliability and transparency.
AI-driven analytics can also help businesses identify risks and opportunities. By processing vast amounts of data and extracting pertinent insights, AI can identify unnecessary steps in processes, saving time and potentially reducing emissions. Moreover, it can monitor energy consumption, discover areas for improvement, and create actionable frameworks for reducing carbon footprints.
With environmental standards becoming stricter, businesses must prepare for the future. AI can process disparate data, evaluate scenarios, and model decisions to improve performance. Embracing AI allows businesses to adapt to changes and reveal opportunities during the transition to a sustainable economy.
In conclusion, the use of AI and generative AI is crucial for businesses to achieve their decarbonization goals. It enables accurate and timely reporting, streamlines processes, and helps identify risks and opportunities. As regulations become more stringent, businesses that leverage AI will be better equipped to navigate the complexities of sustainability reporting and drive long-term value creation.
– The Corporate Sustainability Reporting Directive (CSRD)
– Elisabeth Goos, Market Leader Sustainability Services EMEA & DACH at IBM