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Nasdaq Tackles ESG Reporting Challenges with AI-powered Sustainable Lens

Nasdaq Tackles ESG Reporting Challenges with AI-powered Sustainable Lens

Nasdaq Tackles ESG Reporting Challenges with AI-powered Sustainable Lens
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In 2023, there has been a notable evolution in the realms of sustainability and environmental, social, and governance (ESG). Companies find themselves under increasing pressure to provide transparent and credible disclosures and commitments, driven by stakeholders such as customers and investors seeking more information, coupled with emerging regulatory standards. Amidst progress in standard-setting this year, the market landscape’s constant changes appear to leave companies in a state of confusion.

Reporting on these developments, a new initiative has been introduced by Nasdaq. Nasdaq is set to launch the Nasdaq Sustainable Lens™, a software-as-a-service (SaaS) based ESG intelligence platform. This platform, fueled by generative artificial intelligence (AI), aims to assist companies in navigating complexity and meeting stakeholders’ demands for greater transparency.

The Nasdaq Sustainable Lens equips professionals in sustainability, investor relations, legal, and accounting with on-demand, data-driven insights from over 9,000 companies worldwide. This SaaS platform eliminates the need for manual research based on limited data sets. It provides companies with an AI-powered ESG assistant for summarizing disclosures and answering questions, the capability to search through and access documents from over 9,000 companies, workflows to benchmark disclosures against standards and an unlimited number of companies, and enterprise-grade AI governance from Nasdaq. This tool allows companies to address the mounting pressures surrounding sustainability and ESG more effectively.

In a recent Nasdaq research report titled “The State of Sustainability and ESG in 2023,” Nasdaq utilized the AI workflows of Sustainable Lens to review and analyze documents from approximately 7,200 companies globally. The findings revealed that only 44% of the companies analyzed provide climate-related disclosures aligned with the Corporate Sustainability Reporting Directive (CSRD), International Sustainability Standards Board’s (ISSB) sustainability and climate-related standards, and U.S. Security and Exchange Commission’s (SEC) proposed rules. This compares to 64% of companies providing disclosures aligned with the CSRD and ISSB standards in business ethics and business conduct (governance) disclosures and 75% in human capital (social) disclosures.

Related Article: Nasdaq Capital Access Platforms Launches Sustainability Offerings for Corporates and Investors

As regulatory standards transition into disclosure requirements in 2024 and beyond, and others progress from proposed to final status in certain jurisdictions, companies face increasing pressure to enhance their disclosures.

Recognizing the significant resources required for companies to credibly respond to stakeholders’ questions and meet regulatory demands, Nasdaq emphasizes the role of AI in alleviating these burdens. Sustainability and ESG disclosures, being largely qualitative, unstructured, and dispersed across various documents, present an ideal use case for AI and language models. The Nasdaq Sustainable Lens, as a generative AI ESG intelligence platform, aligns with the intersection of evolving sustainability and ESG landscapes and advancements in AI technology, offering teams newfound productivity gains.

Nasdaq’s strategic use of technology as an enabler remains consistent in its goal to power economic progress, enhance human efficiency, and reveal new proprietary data and insights. The introduction of Sustainable Lens marks another step toward achieving this overarching objective by providing companies with a generative AI ESG intelligence platform that promotes transparency, credibility, faster decision-making using data, enhanced productivity through AI workflows, and enterprise-grade AI governance. Nasdaq positions itself as a trusted innovator facilitating companies in working smarter and uncovering valuable insights in the dynamic landscape of sustainability and ESG.


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