'Data is always missing': checking corporate ethical claims
As global corporations face increasing pressure to report their ethical and environmental credentials, it is spurring a booming industry in businesses looking to verify these corporate claims.
Corporate Social Responsiblity (CSR) has become a key part of financial reporting for many companies, requiring businesses to assess their social and environmental impacts instead of just focusing on economic profits.
At the beginning of 2023, the EU implemented a Corporate Sustainability Reporting Directive, which demanded all large companies report on the impact of their business on people and the environment.
More stringent regulatory frameworks are also taking shape in the United States and through the International Sustainability Standards Board (ISSB), which sets standards for climate-related financial disclosure.
Sylvain Guyoton, director of evaluations and methods at sustainability ratings group EcoVadis, said there is now a "regulatory wave" in this field.
EcoVadis is one of the companies working to verify ethical claims, and says it has rated more than 120,000 companies so far.
Tools that already exist include the Higg Index, which assesses the sustainability of the value chain to judge water use, carbon emissions and labour conditions, among others.
American company Worldly said it has been using artificial intelligence (AI) to authenticate corporate claims, particularly in the apparel and textile industries.
"AI helps us to know whether a subcontractor provides valid information," said John Armstrong, chief technology officer at Worldly.
"When it comes to human rights, AI will lead us in the right direction: if a statement is not precise or there are detected anomalies, we're going to take a closer look," he said.
He said more
Read more on tech.hindustantimes.com
