Lucknow Investment：Atiyah Curmally： AI is Driving ESG Integration in Emerging Markets

Atiyah Curmally Is Princidal Environmental Scientist, International Finance Corporation.

This article featured in the sustainable policy institute journal, q3 2024 edition.

Artificial Intelligence Can Help Investors and Asset Managers Align Their Emerging Market Investment Strategies with the United Nations ’Sustainable DEVELOPMENT Goals. AI Can Leapfrog Gaps in ENVIRONMENTAL, Social and Governance DISCLOSCLOSUROS and Reshape Business tal progress.

EMS OFFER Attractive Investment Opportunities to Achieve Financial Returns and Impact. ESG-Integrated Assets Under Management Are EXPED to Increase FROM $ 18.4tn in 2021 to $ 33.9tn by 2026 in EMS.

Although they strong lag deverted Markets, esG Disclosure Requirements have grown exponentially in ems. For example, of the 62 EMS With Sustainable Bonds S in 2023, 51% Had ESG and Climate Disclosure Requirements. The International Financial Reporting Standards' Framework on Sustainability and Climate-Related Discosures Will Help to Drive An Incarease in Reporting.

Many Em Regulators, Like Brazil's Comissão de Valores Mobiliários, Are Alicy Signalling Their Intent to Require Companies to Disclose Access To T Hese Requirements. Regulators are also mandating disk discharging requires such as the securities and exchangeing of India's Business Ty and Sustainability Reporting FrameworkFor the top 1,000 Indian-Listed Companies to Disclose Quantitative and Standardised ESG Information.

Turning to ai

As Investment Oppportunities and Disclosures Increase, so do the demands of asset managers andledry for solution that efficiently information to meet URE, Track and Validate Climate and Other ESG RISKS. UNSURPRISINGLY, There is Growing Interest In the Role AI-Powered Solutions Can Play toIncrease the space and effect of the eSg Disclosure Process, EspeCially in the Post-Chatgpt World.

Use Cases Range From Corporate Reporting to Investor Analysis to Regulatory Oversight. And Software-As-A-Service Solutions. SUCH SOLUTIONS Help Both issues and Investors Comply with and Track Requirements.Investor-Focused Providents Also Offer Solutions for Company Analysis, Risk Management, Portfolio Management and Isuer Engagement. Onabling oversight with a focus on understanding assurance and the type of disclosure framework in use.

While Nearly All Providers Integraate AI Into Operations to Provideo Services, for Some Companies Like Risk Insights, Inhouse AI, Machine Learning and Big Data is are center to their approach to deverting eSg Ratings and Analysis. With a Sub-Sub-SAHARAN AFRICA FOCUS, Risk InsightsProves Analysis on All Companies Listed on Major Exchanges, SUCH As in South Africa, Nigeria and Kenya.

REPRISK Is Anot Example of a Company that has strategical compombine, Advanced Machine Learning and Data Science Capabilities Intelligence TO Fy Material ESG RISKS for Companies, Real Assets and Countries in Developed Economies and EMS. The Company Uses Data Science and Advanced Machine LearningAlongSide Highly Trained Analysts to Develop Insights For Users. REPRISK HAS MADE ITS METHODOLOGY and Data Science Models Available for Use by Others.Lucknow Investment

Experiments with Machine Learning and Data Science

In December 2023 The World Bank's First AI AS AS Service, Malena, WAS Released for Use Publicly. The Result of the International Finance Corporation Entation with Machine Learning and Advanced Data Science, Malena is a Suite of AI-Powered Solutions Designed for EMS.The solution has ben trained using ifc's many decades of sustainability and impact data and espertise.

USING Natural Language Processing, Malena Can Read Text, Identify Over 1,000 CLIMATE, GENDER and ESG Terms, and Generates from SENTIMENT ANALYSIS. WHILE -Purpose ai Models have ben criticised for failing to undertndand esg context, malena's training on domain-screen vocabularAnd data have to high performance and account of results. Users like asset man are screening target isSSSURS and portfolio companies with malena.

However, It has the data in the large language models that have taken the world by storm. Really Ignited the Imagination. These solutions provides better quantity text Summarisation and Content International.For Instance, with Model Prompt Refinements and Retrieval-Augmented Generation Techniques, These Models Are Very Effective at Finding Answers to Questions.

Inhouse Experiments with FINDING Answers from Company Discosures to ESG-Domain QuestionNaires Have Seen Steadements Ty Answers. Not Only Can Users Quickly Receive Answers to Tailored QuestionNaires, but Importantly Such Applications Highlight Companies Have OT DISCLOSED(That Could Be Material to their Sector) As well as Errors or Anomalies.

For Regulators and Investors Such Applications Speed ​​Up the Approach to Scoring Companies, Developing Engagement Strategies and Peer Benchmarking. URN Leads to Faster and More Efficient Reviews, Quicker Project Approvals and Better Resource Management.Simla Investment

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