chatReport: Democratizing Sustainability Disclosure Analysis through LLM-based Tools

32 Pages Posted: 19 Jun 2023 Last revised: 21 Nov 2023

See all articles by Jingwei Ni

Jingwei Ni

ETH Zurich

Julia Bingler

University of Oxford

Chiara Colesanti Senni

University of Zurich - Department of Finance

Mathias Kraus

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Glen Gostlow

University of Zurich - Department Finance

Tobias Schimanski

University of Zurich

Dominik Stammbach

ETH Zürich

Saeid Vaghefi

University of Zurich

Qian Wang

University of Zurich - Department Finance; Inovest Partners AG

Nicolas Webersinke

Friedrich-Alexander-Universität Erlangen-Nürnberg

Tobias Wekhof

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Tingyu Yu

University of Zurich - Department Finance

Markus Leippold

University of Zurich; Swiss Finance Institute

Date Written: June 12, 2023

Abstract

This paper introduces a novel approach to enhance Large Language Models (LLMs) with expert knowledge to automate the analysis of corporate sustainability reports by benchmarking them against the Task Force for Climate-Related Financial Disclosures (TCFD) recommendations. Corporate sustainability reports are crucial in assessing organizations' environmental and social risks and impacts. However, analyzing these reports' vast amounts of information makes human analysis often too costly. As a result, only a few entities worldwide have the resources to analyze these reports, which could lead to a lack of transparency. While AI-powered tools can automatically analyze the data, they are prone to inaccuracies as they lack domain-specific expertise. This paper introduces a novel approach to enhance LLMs with expert knowledge to automate the analysis of corporate sustainability reports. We christen our tool \textsc{chatReport}, and apply it in a first use case to assess corporate climate risk disclosures following the TCFD recommendations. ChatReport results from collaborating with experts in climate science, finance, economic policy, and computer science, demonstrating how domain experts can be involved in developing AI tools. We make our prompt templates, generated data, and scores available to the public to encourage transparency.

Keywords: Task Force for Climate-Related Financial Disclosures, Sustainability Report, Large Language Model, ChatGPT

Suggested Citation

Ni, Jingwei and Bingler, Julia and Colesanti Senni, Chiara and Kraus, Mathias and Gostlow, Glen and Schimanski, Tobias and Stammbach, Dominik and Vaghefi, Saeid and Wang, Qian and Webersinke, Nicolas and Wekhof, Tobias and Yu, Tingyu and Leippold, Markus, chatReport: Democratizing Sustainability Disclosure Analysis through LLM-based Tools (June 12, 2023). Swiss Finance Institute Research Paper No. 23-111, Available at SSRN: https://ssrn.com/abstract=4476733 or http://dx.doi.org/10.2139/ssrn.4476733

Jingwei Ni

ETH Zurich ( email )

Julia Bingler

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Chiara Colesanti Senni

University of Zurich - Department of Finance ( email )

Plattenstr 32
Zurich, 8032
Switzerland

Mathias Kraus

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
Erlangen, DE Bavaria 91054
Germany

Glen Gostlow

University of Zurich - Department Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Tobias Schimanski

University of Zurich ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Dominik Stammbach

ETH Zürich ( email )

Zürichbergstrasse 18
8092 Zurich, CH-1015
Switzerland

Saeid Vaghefi

University of Zurich ( email )

Qian Wang

University of Zurich - Department Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Inovest Partners AG ( email )

Grabenstrasse 25
Baar, 6340
Switzerland

Nicolas Webersinke

Friedrich-Alexander-Universität Erlangen-Nürnberg ( email )

Lange Gasse 20
Lange Gasse 20,
Nürnberg, 90403
Germany

Tobias Wekhof

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 633 80 78 (Phone)

HOME PAGE: http://sites.google.com/view/tobiaswekhof

Tingyu Yu

University of Zurich - Department Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Markus Leippold (Contact Author)

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

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