ESG Fingerprint: How Big Data and Artificial Intelligence Can Support Investors, Companies, and Stakeholders?

Current research is investigating the extent to which measurements of corporate sustainability through environmental-social-governance (ESG) controversies have an impact on a companys valuation. Early investors, stakeholders, and companies are already using the ESG data and ratings generated to inform their investments or strategic decisions in companies. On the other hand, it is apparent that measurements are often based on static indicators collected annually. Furthermore, analysis has shown that mainstream ESG ratings lack a consistent ESG framework. Similarly, ESG rating indicators are often predefined and do not provide users with sufficient transparency to integrate them into their daily business processes. This is where this chapter comes in and develops an ESG taxonomy based on historical ESG events from which risk patterns, the so-called ESG fingerprint, are automatically extracted. These help to reduce complexity and enable the design of artificial intelligence-based ESG information systems that map the risk management process across phases.