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Using AI to Support Sustainable Investment

Posted by

j.escolar@lri.sg

June 10, 2025 | AI | Reading Time: 3 minutes

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Artificial intelligence (AI) is emerging as a powerful enabler in the transition to a more sustainable economy. By enhancing the way investors identify opportunities, assess risk, and support portfolio companies, AI is helping capital flow more effectively toward solutions that align with long-term ESG goals. We share our perspective on how AI can be strategically applied to advance sustainable investment.

AI’s Role in Investment

In 2025, the use of AI in finance continues to grow. The sector is among the fastest adopters of generative AI, alongside healthcare and manufacturing, as firms look for ways to improve efficiency, accuracy, and decision-making.

For long-term investors focused on the green transition, AI can be a powerful tool. It helps process large volumes of ESG and financial data, making it easier to spot risks, find opportunities, and align investments with both sustainability goals and financial performance.

However, AI is only as strong as the data behind it. Poor-quality or biased data can lead to unreliable insights. To get the most from AI, investors must combine smart technology with strong oversight - ensuring accuracy, managing risk, and staying aligned with evolving regulations.

Finance is among the fastest adopters of generative AI in 2025, alongside healthcare, retail, and manufacturing.

Opportunities AI Opens Up for Sustainable Investment

AI unlocks new pathways to identify and drive sustainable value creation. They present several key opportunities:

Enhanced ESG Screening

Analyzing filings and news to
Assess ESG risk.

Climate Risk Modeling

Integrating climate risk at the asset level.

Impact Measurement

Real-time tracking of sustainability impact.

Supply Chain Transparency

Using NLP and computer vision for supply chain insights.

Portfolio Optimization

Aligning portfolios with ESG and financial goals.

These applications are particularly valuable in private markets, where data is often scarce and fragmented. When used thoughtfully, AI can bridge information gaps and enhance accountability in sustainability-related disclosures.

AI Must Be Used Wisely

To stay competitive, investors must harness AI to uncover new opportunities, assess ESG risks, and better support portfolio companies. When used effectively, AI is a powerful tool for enhancing performance and strengthening decision-making.

But it must be applied with care. AI is not a substitute for human judgment - it should support decisions, not make them. According to the World Economic Forum, robust governance and ethical frameworks are essential. AI has the potential to transform investment practices, but only when used with a strong focus on data quality, transparency, and accountability.

Data Integrity:

AI is only as good as the data it consumes. Investors must ensure data sources are high-quality, unbiased, and contextually relevant.

Transparency and Explainability:

It’s important to maintain clarity on how AI tools inform investment decisions, particularly for stakeholders who demand accountability.

Ethical Use:

Firms must adopt clear governance frameworks to prevent the misuse of AI, particularly in sensitive areas like labor practices, privacy, and human rights.

Human Oversight:

AI should augment, rather than replace human judgment. The most effective models are those used alongside experienced investment professionals who bring context and ethical clarity to every decision.

About La Royale Group

La Royale Group builds and scales future-focused businesses across high-growth sectors, including fintech, gaming tech, marketing, AI and cybersecurity. Backed by deep operational expertise and disciplined execution, we power growth for the future.

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