Key Considerations For CSOs In The Age Of AI

Key Considerations For CSOs In The Age Of AI

Over the last two years, chief sustainability officers (CSOs) have seen multiple changes in their roles, driven largely by increased pressure from regulators, investors and stakeholders for more comprehensive sustainability data. Compounding these shifts is the rapid development and use of AI, which is transforming business operations and the way sustainability teams make critical decisions. As AI reshapes entire industries, CSOs find themselves in a unique position to elevate sustainability performance while also navigating the complexities and risks of this evolving technology.

Internal collaboration is key to achieve this. CSOs will need to work with IT teams from a technical perspective. CSOs must also work with audit, compliance, human resources and legal teams to ensure they understand the ethical risks and compliance obligations associated with AI. In some firms, CSOs may contribute to developing responsible AI programmes that ensure strong corporate governance policies on the use of AI. Additionally, CSOs must understand how other departments are using AI for applications that impact the firm's sustainability programmes. For example, some departments may be leveraging AI for energy management, inventory management or employee recruitment. Understanding how different departments use AI is crucial for the CSO, as its use impacts their firm's overall environmental footprint, due to the increased energy demand associated with running AI models.

In addition, CSOs should evaluate the benefits of incorporating AI to drive progress towards their own missions and goals. Data from the 2024 Verdantix global corporate survey show continued interest for AI among sustainability leaders, with nearly 40% of respondents indicating that they are using or plan to use AI to improve ESG and sustainability disclosures, reporting and performance within the next two years.

To address this demand, many software vendors are incorporating AI into their solutions for a variety of use cases: collecting and aggregating ESG data, engaging with suppliers, conducting asset-level risk analysis, and even preparing first drafts of sustainability reports. With this breadth of offerings, CSOs need to ask targeted questions to prospective vendors. Additionally, with the relative accessibility of AI models, some in-house data science experts may build ESG and sustainability tools that incorporate AI. CSOs should understand the capabilities of both commercial software and solutions developed in-house to evaluate whether AI can help them achieve their sustainability-related goals. Due to the risks associated with using AI, however, CSOs need to be diligent when evaluating their own needs, figuring out if AI is really best suited to address the problem at hand.

To learn more about how CSOs can incorporate AI, please see Strategic Focus: Implications Of AI For The CSO and join our upcoming webinar on October 16.