ESG for AI: Here Come the Accountants

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As AI leaves the laboratory and is adopted at scale, the accounting profession and the finance function have been at the forefront. 

As AI is implemented across all sectors of the economy, however, its implementation raises key issues around its ethical use. This presents considerations across all three of the environmental, social, and governance (ESG) dimensions, which are increasingly driving business and investment.

Big tech is also struggling with the ethical dimension of AI. Earlier this month it was reported that Google’s cloud unit shut down a project with a financial client for ethical reasons for fears the technology would reinforce racial and gender bias.

Google has reportedly also blocked new AI features analyzing emotions, fearing backlash for issues around cultural sensitivity. Microsoft and IBM have also halted projects involving voice mimicry and facial recognition.

Accountants know best

The finance function, arguably, is of even more concern when it comes to ethics and AI because of the regulatory and legislative dimensions.

The accountancy profession, with its explicit and long-standing commitment to ethical practices, sees itself as well placed to guide organizations along a responsible path for AI adoption and understands that the deployment of AI solutions is a professional competency challenge.  

To address the issue, global accountancy organizations ACCA and Chartered Accountants ANZ commissioned some wide-ranging research which has been published in the report “Ethics for Sustainable AI Adoption.”

Based on interviews with 5,723 accounting and finance professionals around the world and backed up with qualitative discussion groups, the research found that 28% of respondents are currently using AI without having implemented an ethical framework for it within their organization.

Thirteen percent are currently using AI without having considered any regulatory requirements for doing so.

On the adoption side, 21% of respondents said their organization has implemented an ethical framework for AI use, while 35% have considered relevant regulatory requirements around AI.

Positively, 66% said their organizations prioritized ethics as highly as they do generate profits.

On the uptake of AI within the finance function, 19% said their organization uses AI for accountancy and finance-related tasks, while 7% used it in audit and assurance.

The report includes a range of pull-out quotes that demonstrate how AI is disrupting the way accountants work, specifically related to ethics.

“The attitude toward AI from the CEO/Leadership team…is to sell anything remotely close to it for as much money as possible,” was one comment.

“I fear sometimes in the future when AI is at its full capacity, whether the human being could be forced to conform to one set of values,” said another.

“We are using AI in Live Chat…[the] benefit is highly personalized service and to maximize organizational efficiencies. Data privacy is the biggest concern about using AI,” was the third response.

Strategic decision

The report makes the overarching point that AI needs to be a strategic decision and not an individual project “delivered deep within a business unit.”

Key to the strategy is an ethical framework, which is consistent with organizational values such as diversity and inclusion, and the consideration of how the use of AI can impact underrepresented groups and how it needs to be used fairly in areas such as surveillance and recruitment.

Addressing the business case for AI, the report urges the consideration of long-term value beyond an immediate narrow use case. There are reputational risks from the mishandling of AI, the report says, and value should be aligned with sustainable business goals.

The risk of unintended consequences is high, and to minimize these risks from AI, the public interest must remain at the forefront.

There is a temptation for quick AI adoption and rapid wins, but the best adoption of AI will be an ethical and sustainable approach, where the business case considers long-term trends rather than seeking the latest tool simply because of fear of missing out.

Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and DigitalWorkforceTrends, and the editor of NextGen Connectivity. His fascination is with how businesses are reinventing themselves through digital technology and collaborate with others to become completely new organizations. You can reach him at [email protected].

Image credit: iStockphoto/Prostock-Studio