Nishtha Verma, ESG Lead at Elm AI

Navigating the ESG landscape Using AI

October 10, 2023 - 5 min read

In an era defined by environmental consciousness, social responsibility, and stringent governance standards, the business world is witnessing a paradigm shift. No longer confined to annual reports, Environmental, Social, and Governance (ESG) factors have become integral to sustainable and responsible business practices. As businesses recognize the impact of their operations on the broader community, there is a growing emphasis on collecting ESG data from suppliers.

‍The Rise of ESG in Supplier Relationships

‍ESG considerations have evolved from being niche concerns to central components of corporate strategy. Investors, consumers, and regulatory bodies are increasingly scrutinizing the ESG performance of businesses. As a result, the focus has extended beyond direct operations to include the entire supply chain. The collection of ESG data from suppliers is now seen as a critical step in fostering transparency, accountability, and sustainable practices throughout the value chain. Yet, the path to ensuring ESG compliance among suppliers is not without challenges. Suppliers operate in diverse environments, each with its own set of regulations and cultural nuances. This diversity makes it difficult to establish a standardized approach to ESG compliance. Traditional manual audits, while valuable, are time-consuming and often prone to human errors. Companies are faced with the challenge of maintaining a delicate balance between ensuring compliance and respecting the unique circumstances of each supplier.

‍The Role of AI Audit Tools in ESG Compliance

‍This is where Artificial Intelligence steps in. AI audit tools are emerging as transformative solutions in the ESG landscape. Leveraging machine learning algorithms, these tools can analyze vast datasets, identify patterns, and ensure compliance with specific ESG standards. The speed and accuracy with which AI can process information makes it an invaluable asset in evaluating supplier practices against ESG criteria and even to generate corrective action plans for ESG practice improvements. As ESG considerations continue to shape the business landscape, the role of AI in ensuring responsible and sustainable supplier compliance practices becomes increasingly pivotal.

Elm AI's audit tool saves organizations 90% of their time on supplier audit analysis and risk assessments.‍

‍What is Elm AI?

‍Elm AI's audit tool revolutionizes supplier due diligence by leveraging advanced Large Language Models that are trained on ESG data as well as on unique company schemas. By automating and accelerating the audit process, Elm AI's tool provides procurement teams with a robust solution to navigate the complexities of supplier compliance.