I will try and keep my today’s piece on something rather basic and simple, yet perhaps two of the most powerful elements today in international business, which are corporate responsibility and artificial intelligence. Aspects that in the modern-day global corporate environment, challenged by greed & control, are bound to test any company’s and consumer’s mettle in achieving sustainable success in a responsible manner.
The first is summarised in a term that is referred to as ESG - Environmental, social and governance. ESG is a framework used to assess practices and performance on sustainability and ethical grounds. In our context, it will be important on how we assess ourselves in terms of others less fortunate than us, in terms of what we can give back to this planet by responsible behaviour from our specific end and how keen are we to equitably share our successes for collective development. This phenomenon by no means limits itself to rich & poor or to weaker & stronger, gender equality, race equality, colour & ethnicity, but to all the intangible ways when no one is even observing a corporate in its quest to do the right thing, even if it visibly puts the financials to a momentary material disadvantage.
For example, Europe maintains its gap with other regions of the world (26.8), well ahead of Oceania (38.9), South America (38.7), North America (39.9), Asia (46) and Africa (56.3). This year, the ESG ranking podium is exclusively Nordic with Finland on top, followed by Sweden (2nd) and Iceland (3rd). The index ranked Pakistan at 161 with overall score of 63 suggesting an urgent need for enhanced efforts in aligning with ESG principles to improve its overall risk profile.
For growing up youngsters, simple things matter: not rolling down the window and throwing your garbage on the road even when there is no fear of being caught; sharing opportunities with the less fortunate that share your surroundings; respecting and conserving nature and wildlife to not only allow them to blossom but to also allow others to enjoy them; and by exerting pressure, in your individual capacity, to ensure entities that flout ESG are constrained somehow. The remarkable and heartening development is that for the first time, numerical data is emerging from 2023 that responsible behaviour, or what is traditionally referred to as moral compass, and monetary success are not necessarily mutually exclusive. So, the idea is to be strong and do the right thing out there even if means standing against the wind!
And second is on AI - Artificial intelligence. AI will enable better ESG but will more AI lead to better ESG outcomes? This is a very interesting interplay of the two hottest areas of debate globally. For a long time, ESG proponents have been batting for better data management, analysis and reporting for a cleaner and more transparent ESG performance and reporting. AI technologies can analyse vast amounts of data related to environmental impact, social responsibility, and governance, enabling organizations to gain meaningful insights into their ESG performance. From an operational perspective, AI-driven algorithms can optimize energy consumption across all processes, reduce losses and waste in value chains, and improve the efficiency of logistics operations. We can reduce carbon emissions and manage our environmental footprint at a company level. AI-powered cleaner energy systems and smart city solutions can contribute to sustainable development goals. From a governance perspective, By, analysing vast amount of data from various sources, AI can identify emerging ESG risks across the supply chain and regulatory compliance issues. However, challenges are a plenty. I remember as youngsters the challenge we faced was how to harness IT (Information Technology) and use the data responsibly cum ethically to unleash operational efficiencies and gain competitive advantage. Today the roles have reversed. It is the AI that we fear, which threatens to take over our lives in an unhealthy manner and replace human beings. Wars are being fought using AI and false narratives are built using AI unethically to destroy societies, icons, value syatems, societies and nations. To detrmine whether results or academic outputs being claimed are truly one’s own or plagarised using AI. And as AI becomes a weapon of cloning and human replacement, the world becomes murkier about right from wrong.
How to counter this though is totally our responsibility as a nation and starting from top down. As new economic managers step in, it will be interesting to see where these elements feature in the importance basket of the newly formed government.
Dr Kamal Monnoo
The writer is an entrepreneur and economic analyst. Email: kamal.monnoo@gmail.com