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Artificial Intelligence in ESG investing: Enhancing portfolio management and performance
1 Independent Researcher, Chicago USA.
2 Access Bank Plc, Nigeria.
3 Sanctus Maris Concepts, Nigeria Ltd.
4 Independent Researcher, Nashville, Tennessee, USA.
5 Independent Researcher, Maryland, USA.
6 Department of Business Administration, Skinner School of Business, Trevecca Nazarene University, USA.
Review
International Journal of Science and Research Archive, 2024, 11(01), 2194–2205.
Article DOI: 10.30574/ijsra.2024.11.1.0305
Publication history:
Received on 08 January 2024; revised on 15 February 2024; accepted on 17 February 2024
Abstract:
Artificial Intelligence (AI) has emerged as a transformative force in Environmental, Social, and Governance (ESG) investing, significantly enhancing portfolio management and performance. This paper investigates the integration of AI technologies within ESG investment strategies, elucidating their profound impact on decision-making processes and financial outcomes. By leveraging advanced data analytics and machine learning algorithms, AI empowers investors to analyze extensive ESG-related datasets, extract actionable insights, and identify investment opportunities aligned with sustainability objectives. The application of AI-driven ESG analysis enables investors to construct well-structured portfolios that not only aim for financial success but also adhere to ethical and sustainable principles. Through the utilization of AI, investors can systematically evaluate the environmental impact, social responsibility, and corporate governance practices of potential investments. This approach facilitates the identification of ESG risks and opportunities with greater precision and efficiency, leading to more informed investment decisions. Moreover, AI enables investors to dynamically adjust their portfolios in response to changing market conditions and emerging sustainability trends. By continuously monitoring ESG factors and leveraging predictive analytics, investors can proactively manage risks and seize opportunities to enhance portfolio performance over the long term. This proactive approach not only mitigates potential ESG-related risks but also positions investors to capitalize on emerging market trends and shifts in consumer preferences. Furthermore, the integration of AI in ESG investing fosters transparency, accountability, and stakeholder engagement within the investment ecosystem. AI-powered tools facilitate the dissemination of ESG-related information, enabling investors to make informed decisions that align with their values and sustainability goals. By harnessing the capabilities of AI, investors can drive positive environmental and social impact while achieving competitive financial returns. In conclusion, the utilization of AI in ESG investing represents a paradigm shift in portfolio management, offering investors unprecedented opportunities to navigate complex ESG challenges and achieve sustainable financial success.
Keywords:
AI; ESG Investing; Portfolio Management; Performance
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Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0
