Are AI and ESG Compatible? The answer is yes, but human oversight and management are required. Environmental Impact. A major issue in AI deployment is energy consumption. According to The New York Times, citing a peer-reviewed study published October 10, 2023, in 50 Joule, “servers could use between 85 to 134 terawatt hours (Twh) annually. That’s similar to what Argentina, the Netherlands and Sweden each use in a year, and is about 0.5 percent of the world’s current electricity use.” Erdenesanaa, Delger, A.I. Could Soon Need as Much Electricity as an Entire Country, New York Times, October 23 ..read more

According to a recent study by Bitkom, Germany’s digital association, accelerating digitization can lead to savings of around 73 million tons of CO2 by the end of the decade. From optimizing wind turbines and smart agriculture practices to digital modeling that can be used to make manufacturing processes more efficient, there are ever-evolving opportunities to cut emissions with digitization.  Developing a digital strategy can help companies stay competitive and contribute to a greener future. With the right support from policymakers and continued innovation, digital climate protection ca ..read more

The World Economic Forum recently released its 2024 Global Risks Report, which identifies four main destabilizing forces in the coming year: climate change, demographic shifts, technology, and geopolitics. The repercussions—extreme weather events, AI-generated misinformation, a cost-of-living crisis, cyberattacks, and socio-political polarization—are already impacting billions of people across the globe.  What does the World Economics Forum propose as solutions? Emissions reduction, technological advancements, and global cooperation. The report calls for a proactive approach, recognizing ..read more

Marc Segal, in his January 1, 2024, article in the online ESGtoday, reported there was a remarkable 50% surge in global renewable energy capacity in 2023, with a substantial, 510 GW increase. China stood out as a key driver, contributing significantly to this global growth.  The Executive Director of the International Energy Agency (IEA), Fatih Birol, noted that the world is on track to increase renewable capacity by two and a half times by 2030. This would bring within reach the COP28 goal to triple renewable energy generation by 2030. China’s role will continue to be pivotal, accounting ..read more

DEI training (or Diversity, Equity, and Inclusion) is a winning business strategy, and a cornerstone of business sustainability. To succeed, a business must attract and retain talent; DEI broadens talent pools and promotes the sense of belonging that makes employees want to stay. Like any other element of strategy, for DEI to succeed requires more than one-off training exercises. It requires continuous learning that results in DEI becoming embedded in employees’ everyday lives, in what they do every day. It is said that true inclusion is not a destination, but a journey of active effort. Workp ..read more

A memo recently sent by David Carlin highlighted how AI can be used to assess transition places. The research team from the University of Zurich and the Oxford Sustainable Finance Group reviewed various transition plans, identifying key indicators related to targets, governance, strategy, and tracking. These elements allow for an assessment of the ambition, credibility, and feasibility of the plans. The AI tools can flag plans with potential issues, aiding in decision-making processes. Of the four use cases for this type of work laid out in Carlin’s article, which seem most relevant to you? Ar ..read more

A recent Press Release by the European Parliament highlights the groundbreaking decision of COP28 to transition away from fossil fuels and embrace renewables and energy efficiency. While avoiding stating ‘phase-out,’ it indicates a departure from fossil fuels, with expectations of increased stocks in renewables, energy efficiency, and even nuclear energy. Peter Liese, Chair of the European Parliament’s delegation, claimed the outcome as truly historic and commended the EU team, particularly Commissioner Hoekstra, for their role. COP28 marks an important moment by addressing fossil fuels for th ..read more

The recent legal challenges, highlighted in an memo by Wachtell, Lipton, Rosen & Katz,  to Diversity, Equity, and Inclusion (DEI) initiatives following the SFFA v. Harvard decision has stirred controversy. The U.S. District Court for the Eastern District of Washington’s dismissal of claims against Starbucks highlights how DEI policy and integration can vary organization to organization and the courts should not interfere.. Judge Bastian emphasized that courts should not interfere in legitimate corporate decisions, confirming that the establishment of DEI strategy is within the rights ..read more

An article recently published by Cooley PubCo lays out how the recent backlash against ESG can be an opportunity for organizations to reevaluate their ESG strategies. The authors highlight the perspective by The Conference Board (TCB), that while initially negative ESG backlash can seem like a setback, it actually, “can be a clarifying moment for companies.” In a recent survey conducted by TCB, half of the companies indicated experiencing some form of ESG backlash, with concerns ranging from industry-specific challenges (26%) to broader societal opposition (20%) and targeted criticisms ag ..read more

In today’s business landscape, Environmental, Social, and Governance (ESG) considerations have becomecritical factors in evaluating the sustainability and ethical practices of organizations. As businesses increasingly recognize the importance of responsible practices, it is crucial to extend scrutiny beyond internal operations to vendors and stakeholders in stakeholder risk management. This article delves into third-party risk management, emphasizing the need to know your vendors and stakeholders and their sustainability practices and ESG policies. ESG encompasses a set of criteria that invest ..read more