Assuring Sustainable Futures: Auditing Sustainability Reports using AI Foundation Models

26 Pages Posted: 14 Jul 2023

Date Written: July 4, 2023

Abstract

Ensuring compliance of sustainability reports, especially Environmental, Social, and Governance (ESG) reporting, with the EU Taxonomy is essential in the European Union. In parallel, a significant transformation of Artificial Intelligence (AI) can be observed, shifting from task-specific models towards Foundation Models. This study investigates the incorporation of AI Foundation Models into the auditing process of ESG reports. OpenAI’s GPT, a foundation model, is utilized in this study to analyze sustainability reports to assess their compliance with the EU Taxonomy and providing auditors with critical insights. The integration of Foundation Models with traditional auditing methodologies signifies the advent of an innovative epoch in auditing of ESG reports, characterized by enhanced efficiency and insights.

Keywords: Generative Artificial Intelligence, Foundation Models, Deep Learning, Risk-based Audit, Sustainability, Audit, Assurance

JEL Classification: M40, M41, M42, O30, O32, O33, Q55, Q56

Suggested Citation

Föhr, Tassilo Lars and Schreyer, Marco and Juppe, Tatjana Alexandra and Marten, Kai-Uwe, Assuring Sustainable Futures: Auditing Sustainability Reports using AI Foundation Models (July 4, 2023). Available at SSRN: https://ssrn.com/abstract=4502549 or http://dx.doi.org/10.2139/ssrn.4502549

Tassilo Lars Föhr (Contact Author)

Ulm University ( email )

Albert-Einstein-Alee 11
Ulm, D-89081
Germany

Marco Schreyer

University of St. Gallen ( email )

Dufourstrasse 50
St. Gallen, St. Gallen 9000
Switzerland

HOME PAGE: http://www.unisg.ch

Tatjana Alexandra Juppe

Ulm University ( email )

Albert-Einstein-Alee 11
Ulm, D-89081
Germany

Kai-Uwe Marten

Ulm University ( email )

Albert-Einstein-Alee 11
Ulm, D-89081
Germany

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