Sustainability is a top priority for everyone. AI has surfaced as a key solution for addressing complex challenges in today’s macro-economic environment, but what is its place when it comes to ESG in logistics and supply chain management? We spoke to Bernadette Bulacan, Chief Evangelist at Icertis, about the role of AI in augmenting ESG efforts, how bias can be removed, and the cost considerations associated with implementing AI solutions for ESG. You can listen to the full interview below.
Bernadette, what are the first steps that companies should take when implementing AI for their ESG efforts?
The first step we see is organisations taking a look at their entire supplier base and seeing who has performed. There is going to be a great deal of data about who has an overall high level of performance or is already ESG compliant.
Secondly, organisations are looking at the rights and representations that are in the contracts. They have also started to think innovatively about new types of clauses. For instance, companies explore the possibility of termination of the contract if they are able to find another supplier who can produce the same part greener. They also look at the audit rights and make sure they can look at financial records but also ensure that operations are run the way they were described.
And lastly, companies are using technology and AI to ingest those obligations into workflows. Too often organisations agree to certain things when they sign a contract and do not actively check afterwards.
All of these are needed because with allegations of greenwashing, companies need to be able to prove their claims.
How do we understand something like AI which has so many aspects? Do you think companies are able to understand it and benefit from it?
We see organisations that are absolutely benefiting from AI. It is beneficial for ESG when pointed at a very rich data pool. Supplier relationships offer so much data from those contractual relationships.The only way to manage the data and the supplier relationships is through the power of AI. Supply chain and procurement teams can structure the data and easily surface it.
The average loss from a supply chain disruption has been around $82 million, so surfacing the right data is incredibly important for any company’s bottom line.
When it comes to ESG we need to talk about ethics. Is there a problem with using AI to achieve a more ethical organisation?
At Icertis we think a lot about Ethical AI and we want it to be sustainable, fair, accurate, and to eliminate hallucinations and bias. One of our principals is that we’re surfacing data and have kept the humans in the loop. People are augmented by the AI, vs it making those decisions.
When armed with the right data, humans are able to make better decisions about their suppliers. This will outweigh the new challenges that are connected to AI.
Listen to the full interview with Bernadette Bulacan, Chief Evangelist at Icertis about how AI can support ESG and why putting a price tag on an AI project might be counterproductive.
