Scandals, secrets, and corruption. From Samsung’s bribery charges to the Weinstein Company’s sexual abuse accusations to the massive Equifax data breach, 2017 was a year of full-blown moral conundrums for big business. Corporate calamities have increasingly tarnished Americans’ perceptions and trust in big business and establishment practices. Just Capital’s 2017 Survey alone shows 62% of Americans distrust Fortune 500 companies.
Even so, in the past several years, corporate social responsibility (CSR) has become crucial for major companies, especially after the corruption that caused the 2008 Recession. Consumers, especially Millennials, have become loyal to institutions and brands that are ethically and socially responsible. The 2017 Cone Communications CSR Study finds that 87% of consumer will purchase products if the company advocates for issues for which they care, but 76% surveyed refuse to support a company if they supported issues contrary to their beliefs.
While the newest deregulatory laws make it easier for businesses to sidestep ethical standards, like environmental protections, experts predict that future regulations on CSR reporting will evolve in response to deregulation, ultimately addressing emerging trends and disruptive technologies. AI, the most innovative emerging technology, can help monitor CSR reporting.
As major companies implement AI infrastructures, these innovative tools will become the watchdogs for more ethical corporate practices. Already, big businesses are utilizing disruptive trends, but AI can help businesses realize and reinforce global CSR and, ultimately, a company’s double bottom line. Here’s how:
In CSR We Trust
At its core, corporate social responsibility (CSR) is a business approach that provides sustainable economic, social, and environmental benefits to its stakeholders and society. When businesses become financially stable and meet their obligations to both investors and the law, they can focus on ethical and philanthropic goals like creating shared value or community development, among others. In PwC’s 17th Annual Global CEO Survey, 74% of CEOs reported that measuring and reporting their impact was crucial to long-term success. A 2017 KPMG CSR Reporting study further reports that three-quarters of large to mid-size companies issue CSR reports, while 78% of the world’s largest companies integrate CSR data in their annual financial reports.
Michael Posner, the director of the Center for Business and Human Rights and an ethics professor at NYU, says that companies can not only improve moral dilemmas, but benefit their brand’s image by becoming more efficient and productive, while appealing to more potential employees.
Authentic and transparent reporting strategies remain a crucial aspect of any ethical, reliable business to satisfy consumers and solidify satisfactory relationships with investors, vendors, coworkers, and customers alike. In fact, businesses in emerging markets, like major AI companies, are expected to continue reporting on their CSR as the public and investors remain interested in its socio-economic impacts.
However, many enterprises fail to report their business logic, value creation, and materiality in substantial ways. Even some stock exchanges are requiring companies to disclose descriptions of the processes behind the numbers. But that’s where AI can step in.
AI as Moral Watchdog
The rise of AI in business is transforming the way we work and live. AI is democratizing industry and access to information in all sectors. It’s this access to more information and data, among other features, that can improve businesses through better reporting, strategy, and analysis.
IBM along with major tech giants Amazon, Google, Facebook, Microsoft, and Apple have partnered with nonprofit and scientific organizations to form the Partnership on AI to guide AI’s benefit to society. While AI is still in the development stages of fully autonomous moral decision-making, it can help corporate leaders make ethically responsible decisions. There are a number of intelligent and cognizant qualities AI can improve when monitoring the progress of economic, social, and ethical CSR business models.
Intelligent and Cognizant CSR
Reduce Human Bias — In the future, AI will advocate for HR practices by identifying and eliminating human bias in job descriptions and workplace communications. It can also help safeguard the company from discrimination suits and benefit social interactions while improving the equitability of gender and demographic relations.
Understand Business Values — AI systems are now programmed to understand the business value drivers that help an organization reach its goals.
Once a CSR program is created, AI’s algorithm can help map out a business strategy for multiple business players by assessing past performance markers along with set goals like revenue. AI then helps to configure and optimize the CSR program for maximum impact.
Performance Analytics — Performance metrics are crucial to the assessment of a business’ operations. In-depth, multi-platform analytics can help give accurate insight into how a company adheres to regulatory standards, but also global standards. Measuring big data against the performance data of other ethical companies can help companies tailor their operational strategies to more ethical standards by dynamically monitoring and tracking emerging global patterns.
Management Review — Managers often help complete tactical duties like recruiting, onboarding, and performance management tasks including corrective action and appraisals. Although managers and HR team will still be available to consult within offices, AI can deliver better information more efficiently. Overall, AI can help expand management review and HR as employee resources.
Fraud Detection — Machine learning, a subcategory of AI, can detect fraud through techniques like supervised machine learning (SML). In its beginning stages, it can detect fraudulent accounts and cyber activity that appears similar to previous attacks. Currently, neural networking is allowing SML to identify false negatives and false positives that might be found in other SML models. Companies can use these to detect fraud patterns faster, identify fraudulent accounts easier, and decrease the chance of false results.
Integrate CSR Strategy and Initiatives — The data that AI offers can streamline operational efficiencies and create strategies for business goals, planning, employee retention, and organizational development among others. Combined in AI systems, this organized data is easily retrievable from cloud software with access to business initiatives and supportive predictive models that help demonstrate how skilled employees could reach their goals.
AI’s Economy of Ethics
AI can offer both large and small companies opportunities to not only thrive economically, but ethically. Business infrastructure and AI will eventually become so interconnected with efficient tools and accessible data that businesses, employees, and everyday people can proactively learn and align themselves with ethical standards. AI gives big businesses incentives to realize that they can thrive peacefully with society, not at its detriment. Once AI gives us the vision to practice what we preach, we can build and revolutionize an economy of ethics. While it may seem ironic in today’s political climate, AI will reset our ability to give back especially when is programmed to empower regular business practices and those that benefit from them.