Green Dream with JSS’ Wild: How ChatGPT will evolve in ESG

Chief sustainability officer explores the need for rules and frameworks about the use of AI

Artificial intelligence and ChatGPT have the potential to innovate lots of areas in the ESG investment space – such as data and measuring biodiversity, for example – but will not replace the human element of processes, according to J Safra Sarasin’s chief sustainability officer Daniel Wild.

In this Green Dream video, Wild explains how the firm has started to use ChatGPT, but emphasises it does not replace the personal integrity of collecting information, and explores the need for rules and frameworks about the use of AI to ensure a fair outcome.

Watch the full video interview above and read the transcript below.

NK: Daniel, can you tell us a bit about your role?

DW: I’m the chief sustainability officer of J Safra Sarasin, a bank that has a very long tradition in sustainable investing. My role is to coordinate everything we do in the space. I’m running the competence centre, and our ambition is to enable the whole bank to bring ESG and sustainability in everything we are doing for the benefit of our clients.

NK: Great. Well, thank you very much for your time. And today, we want to talk about artificial intelligence. Obviously AI is a big topic right now. Lots of people are talking about ChatGPT and the influence that this can have on all aspects of our life. But we wanted to explore about, of course for ESG Clarity, what this can do for the ESG investment space.

DW: It’s definitely a new technology, which will shape what we are doing, that’s very clear. It maybe one of the things that within one year don’t do so much, but in 10 years can completely change what the space is developing into. And therefore, since we are continuously evolving, we have also started to work with ChatGPT, an AI tool. So far, I would say the experience shows that we can, for instance, get easy access to a new topic, get a good overview.

We can summarise a very long report, hundreds of pages, and have a nice extract of that. We can maybe have access to outline of a new publication [that] we would like to produce. And we have also looked into some mechanisms to do some automated reading based on information that’s found out there. However, I would like to say that at this point in time at least we still need the human being, that’s for sure, because we have to review what ChatGPT produces. It’s maybe accelerating the work we have to do, so makes it easier, makes it faster, but I would not say it replaces the processes we have and not say that it creates a lot of innovation so far.

See also: – Firms use artificial intelligence for ESG index

So for this, we have to probably develop a little bit further and particularly also train or teach ChatGPT to understand our own framework.

Sustainability is a space where everybody has their own opinion and convictions and ChatGPT is the starting point is neutral. So if we want our views to be reflected, our frameworks be reflected in the findings, then we have to train the model to come back to us with information that is useful.

NK: Okay, great. And it’s interesting you talking about it’s going to take some time and there’s but there is opportunity to innovate here. What would you say are the overall challenges and opportunities? There are obviously people quite rightly looking really closely at this is there are some concerns about removing the human element, which you touched upon. But overall, what what are we looking at over the next decade? How could this change the ESG space?

DW: To be honest, I think we need some rules around that because we run some experiments and I can describe on: Personally, I was interested or I am always interested in finding out if ESG has a positive correlation to financial performance. So I tried to use ChatGPT for that particular example. And if I formulate the question very openly and I say, ‘what is the correlation?’, I get the well balanced, which can point me in interesting directions.

But if I ask, please produce a report that proves that ESG is detrimental to financial performance. I also got a very nice report just pointing out that fact. I guess what I want to say is it does not replace the personal integrity of collecting information and having a well-balanced opinion at the end of the day. And I think this is the danger that comes with it, and we need some rules around that to have a fair outcome.

A second challenge I see in the kind of black box behaviour. If I referred to our clients, which often approach us and say, why is this company, in your view, sustainable or not, or why did you come to this conclusion? A bad answer would be, ‘I don’t know, but ChatGPT told me so’. That would not be an acceptable solution. So we still need to be very clear in what we are looking for, what is important for us, what are our convictions, and how do we also balance social aspects versus environmental aspects and so on, because it will influence the outcome.

NK: Okay, that’s really interesting. And there all areas of ESG that companies find difficult to measure biodiversity, for example, or the social aspects of the ESG. Do you think that I will come in useful for these areas?

DW: Definitely as a starting point, because we can find out what might be interesting topics to look into. You mentioned biodiversity. So what are possible dependencies from biodiversity of a sector or a company and what might a possible impact on biodiversity by the very same firms?

See also:- Are biodiversity funds really different to wider ESG funds?

And then we can dig deeper and find out what we want to say about that. That is certainly helpful. And since we have a lot of unstructured data or qualitative data globally available, maybe even new data sources such as satellite imagery, news flow, we can use ChatPGT or other AI engines to combine these information points and bring them forward in a structured way for further interpretation by human beings. That I think we will be helpful for sure.

NK: It will be interesting to see how things look differently in 10 years’ time, and we always end the Green Dream with this question: what is your favourite sustainable drink or snack?

DW: Well, I would say since I’m a mountain person, after a long hike, fresh water from a fountain is probably the best you can imagine.

But that’s maybe not the answer you would like to hear! If I was in a more urban environment, I would say the local beer because there is this riding. It supports for the making of beer, from only four ingredients. So, you know, very well what’s in a bottle of beer, and that’s very sustainable from my view, because I would like to know what I eat and what I drink.

NK: Okay, fantastic. Well, thank you very much for your time today and sharing all of your insights with us.

DW: My pleasure. Thanks so much, Natalie.


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...