Accountants are Essential in Adopting AI for ESG Purposes

The broad applicability of AI across society must be handled carefully and professional accountants have a key role to play.

As Artificial Intelligence (AI) becomes more mainstream, environmental, social and governance (ESG) considerations are a key part of ensuring responsible adoption.

AI for ESG Purposes

ACCA (the Association of Chartered Certified Accountants) reveal in a new report the pressing need for the accountancy profession to make the necessary connections between Artificial Intelligence (AI) and its relationship to environmental, social and governance (ESG) dimensions.

Cautious Attitudes Towards AI

Polling over 5,700 respondents, including expert panellists in Ireland, the research reveals a global cautious tone, with fewer than half (43%) believing that the impact of AI on their rights as an individual is positive – such as safety and personal security, levels of fairness, levels of choice, levels of transparency. In Ireland, 37% believe this to be the case.

Key findings from the research amongst Irish accountancy and finance professionals shows that:

• 67% believe that their leaders prioritise ethics as highly as profits, compared with 82% of respondents in North America.
• 63% believe that the impact of AI on theoverall standard of living in society is positive – compared to 64% globally.
• 48% have a basic understanding of what an algorithm is and just 15% say their organisation has implemented an ethical framework for AI use.

Accountants well Placed to Lead the Way in Ethical Application of AI

ACCA say in Ethics for sustainable AI adoption: Connecting AI and ESG that professional accountants, with their explicit and long-standing commitment to ethical practices, are well placed to guide organisations along a responsible path for AI adoption.

Caitriona Allis, head of ACCA Ireland says: “These insights present a wake-up call for the accountancy profession to lead the way and become the super connectors needed to ensure an ethical approach. Their management of the transition to mass usage of AI in an ethical, responsible manner is essential if sustainable long-term value is to be secured from it.’

Key Recommendations in Adopting AI

The report’s nine recommendations include the need to set the tone at the top of AI adoption by prioritising an approach that is consistent with organisational values such as diversity and inclusion in considering the impact of AI on under-represented groups, or fairness when it comes to recruitment or surveillance of employees; and transparency such as appropriately disclosing AI use to customers.

Another recommendation for the profession is to challenge greenwashing and seek insights from AI tools to help with professional scepticism in examining whether the organisation’s claims about sustainability, such as on achieving net-zero targets, are matched by its performance. Suspect claims need to be challenged.

Speaking of the global picture, Helen Brand, chief executive of ACCA says: “AI adoption must consider the needs of all, especially the under-represented and vulnerable in society. That’s why one of our recommendations is to ensure the profession exercises its professional judgement, because AI may create previously unseen situations.

“We recommend that professional accountants need to avoid over-reliance on simplistic checklist-based approaches which don’t give the full picture or leave space for unintended consequences.”

The global accountancy profession is bound by the Code of Ethics (the ‘Code’) and its five fundamental principles as set out by the International Ethics Standards Board for Accountants (IESBA). These are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

Prepared by Suzanna Hayek