AI to help Asia-Pacific meet ESG challenges
January 28, 2025
25% of Asia-Pacific businesses rank ESG compliance as their biggest hurdle this year.
A recent IDC report, Leveraging AI to Overcome ESG Compliance Challenges, found that “over 25% of businesses in Asia/Pacific rank Environmental, Social and Governance (ESG) compliance requirements as their top challenge in the next 12 months.” With the region’s economies heavily reliant on exports, especially to Western markets, governments and businesses are under increasing pressure to transition to more sustainable practices.
“Economic vulnerabilities combined with the steadily increasing impact of climate change in the region will result in sustainability regulations in the Asia/Pacific region to lean towards being stricter in order to ensure economic growth and give businesses a competitive edge in the global economy,” said Abhishek Kumar, Associate Research Director, IDC Asia/Pacific.
Early adopters such as Japan, Singapore, India, and Indonesia, all of which have implemented carbon taxes, are driving change. These nations, with their export-heavy economies, are particularly sensitive to evolving global regulations.
The report spotlights innovative AI-powered solutions developed by Asia-based providers, including Impact Intelligence and Alibaba Cloud in China, and ESGpedia and Unravel Carbon in Singapore. Kumar noted that “a number of innovative AI-powered solutions are being developed to help businesses tackle their growing ESG-related compliance requirements.”
Financial institutions are increasingly leveraging these solutions as part of their sustainability efforts. For instance, Singapore’s OCBC bank uses ESGpedia’s Nexus platform to facilitate sustainability-linked loans (SLLs) for small and medium enterprises (SMEs). The bank, which has “set ambitious decarbonization targets,” has grown its sustainable finance portfolio from SGD $10 billion ($7.6 billion / €7.1 billion) in 2020 to over SGD $64 billion ($48.6 billion / €45.2 billion) as of Q3 2024.
The IDC report provides detailed insights into how businesses can tackle ESG compliance challenges with innovative, AI-driven solutions tailored to the Asia-Pacific region.
Categories : World Focus
Tags : AI Business Compliance ESG Innovation Sustainability
