AI-Powered ESG Sensor
ESG Sensor is a collection of AIs that help investors monitor large quantity of fast-changing data in order 1) to identify actionable ESG events, and 2) to forecast the impacts of these events before they materialize.
The motivation for Dynamic ESG Materiality Appraisal also applies to the assessment of ESG performance in a portfolio. Namely, each company has its unique set of exposures, and these evolve continually and in some cases dramatically within a short period of time.
While some of the factors driving ESG performance are long-lasting, others are heavily event-driven. As the size of the universe increases, it quickly becomes impossible for investors to cover all essential sources in a timely fashion.
With AI, investors can monitor more sources, weighted in their preference, with virtually no lag. Moreover, a more advanced AI can forecast ESG performance based on collected information, giving asset managers and ESG teams a head start in tackling potential risks and in assessing potential opportunities before they become public.
ESG Sensor-Monitor
The ESG Sensor-Monitor AI uses a similar data-mining setup as Dynamic ESG Materiality Appraisal, though a more extensive scope is usually defined to capture day-to-day events. The analyzer module should be customized to generate alerts to investors of actionable and/or otherwise significant events.
ESG Sensor-Forecaster
The ESG Sensor-Forecaster forecasts the impact of the events on ESG performance on a parametric level. Its aim is to help investors predict changes in ESG performance and take actions before the impacts materialize.
A key point worth noting is that AI, by virtue of its ability to processor large amounts of data in a timely fashion, is able to identify non-obvious patterns in forecasting. Hence, it can be a useful tool to add to your insights when making investment decisions.
To read these concepts in detail, please download our White Paper What AI Can Do For Investors in ESG.
