COP28 Shows an AI Path to Climate/Finance Investment

The COP28 (Conference of the Parties) summit is in full swing at Expo City in the United Arab Emirates, slated to run from November 30 to December 12.

Among other issues being covered at the climate change conference is how artificial intelligence can streamline and improve “the scale and deployment” of finance across myriad business sectors – and how that has a direct impact on how the corporate community can get a grip on climate change.

That’s the takeaway from a new update by Tara Brady, president of Google Cloud Europe, Middle East & Africa, and Jackie Pynadath, director of sustainability & innovation, Google Cloud Europe Middle East & Africa.

“The good news is the financial services sector is stepping up in its role to accelerate industry decarbonization and find innovative financing solutions for issues like climate risk, water & food stress, and nature loss,” Brady says.

The Google note points to finance giants like HSBC and ING, noting both companies have made massive commitments toward providing access to sustainable financing and investments over the past few years. HSBC has committed up to $1 trillion by 2030 and ING has done the same, posting a $600 guarantee to “help fund climate transition initiatives.”

Leveraging AI to Follow Through on Climate Finance Initiatives

Brady says Google Cloud is partnering with both companies to bring their massive financial resources to the global climate change fight in different – but highly effective ways.

— HSBC is leveraging Google Cloud technology for its global clients.

“One example is HSBC’s risk advisory application built on Google Cloud,” Pynadath says. “This project helps their fixed-income traders improve their what-if simulations and their ability to service their customers in the context of climate impact. HSBC uses this technology as a reflection of its philosophy that sustainability and climate risk are no longer isolated categories within a business. Rather, they are a part of every person’s job.”

— ING is using AI to build software tools that trigger early warning signals “related to client behavior for their wholesale banking portfolio managers in near real-time.”

The technology is founded on external data, (think global news analysis and alerts, updates on climate risk, human rights violations, corporate bankruptcies, and cyber-security fraud, among other dominant geopolitical news.

“What is compelling about this solution is the sheer volume of data that is processed daily for these portfolio managers using AI,” Pynadath says. “Climate impact cuts across all aspects of company operations, and this solution helps ING’s commercial banking division surface relevant insights to act upon.”

Look for more big financial services companies to harness AI to boost their climate initiative efforts, and sooner rather than later.

“Companies must urgently respond to the climate agenda – both to decarbonize but also act on the climate risks to their business,” Brady says. “AI and cloud technologies will be critical in bringing business insights for targeted action and unlocking new sources of value.”

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