Artificial Intelligence is increasingly used to evaluate environmental, social and governance (ESG) metrics, detect greenwashing, and provide better transparency into company behavior. This article explores how AI contributes to more ethical investing.
Better data, better decisions
AI aggregates large data sets (reports, news, satellite imagery) to score companies on ESG metrics. This helps investors move beyond limited disclosures and make data-driven decisions.
Detecting greenwashing
Machine learning models can spot inconsistency between corporate claims and observed activity — for example, satellite data that contradicts reported environmental initiatives.
Personalized ethical portfolios
AI can help tailor portfolios to individual values, excluding industries or companies that clash with a client’s ethical constraints while optimizing risk and return.
Challenges
AI models are only as good as their data. Biases in training data and opaque algorithms can create misclassifications, so human oversight remains essential.
Conclusion
When used responsibly, AI can increase transparency and help investors build portfolios aligned with ethical goals, but it must be paired with solid governance and validation.