How is AI getting integrated into Sustainable Finance?
We can see that AI can be integrated and embedded into different technologies to aid decarbonization and support sustainability objectives.
Where is AI getting integrated into Sustainable Finance?
We believe that AI will increasingly get integrated into activities that can be funded under Use of Proceeds for sustainable finance or connected to KPIs and targets in Sustainability Linked transactions (examples below):
- Digital Doctors = social use of proceeds/KPI to increase health services access reach;
- Companion Robots = Social use of proceeds for aged care (check out the Book Klara and the Sun);
- Smart/Precision Agriculture/Farming = green use of proceeds; and
- Optimizing Energy Efficiency = green use of proceeds.
Transactions including AI
Johnson Controls (Green Finance Framework)
- Digital Solutions: AI (Artificial intelligence) and IoT (Internet of Things) based solutions for improved environmental performance of buildings through smart data analytics and energy management software.
NXP Semiconductors (Green Innovation Framework)
- Edge processing – reducing the need for energy-hungry cloud services. NXP sees great opportunities for energy saving, as well as for our business, by further enhancing our investments in Artificial Intelligence R&D for usage in microcontrollers.
Social & Green
AI can help provide access and increase affordability of many social services. This is important for social concepts in sustainable finance.
AI can also aid digitization to make this more efficient which connects to green, and in many cases supports key actions to drive decarbonization and transition to save energy, increase yields and drive productivity (nicely aligning to green themes).
AI is a Mega-force
AI is a mega-force and if harnessed correctly can aid decarbonization, support green activities and increase access and affordability for social projects and services.
There will be displacing elements of AI in relation to some jobs, however, if used and embedded into many sustainability initiatives it should be a net positive.