Title: The impact of artificial intelligence on environmental, social and governance investing: the case of Nexus FrontierTech

Authors: Terence Tse; Mark Esposito; Danny Goh

Addresses: Hult International Business School, 1 Education St, Cambridge, MA 02141, USA ' Hult International Business School, 1 Education St, Cambridge, MA 02141, USA; Harvard University, Massachusetts Hall, Cambridge, MA 02138, USA ' Nexus FrontierTech, 1 St Katharine's Way, London E1W 1UN, UK; Oxford Saïd Business School, Park End St, Oxford OX1 1HP, UK

Abstract: The finance industry has been rocked by disruptive innovation driven by the rise of environmental, social, and governance (ESG) investing and the growing use of AI-based solutions. Generating accurate ESG ratings for companies is challenging, as such ratings are often based on inaccurate and uncontextualised data. The problem is that little is known about the impact of artificial intelligence on ESG investing and how AI models can overcome obstacles in this process that are impossible for human workers to realistically overcome at a low cost, with speed and error-free. This research addresses the problem through a single-subject, archival case study by presenting the case of Nexus FrontierTech, a company that developed an AI-based tool that automates the ESG reporting and rating process without replacing human analysts' abilities. The results of this study contribute a fresh perspective of scholarly knowledge on applications of AI to ESG investing and reporting.

Keywords: artificial intelligence; AI; environmental; social; and governance; ESG; ESG investing; archival case study; Nexus FrontierTech; fintech; software; asset management; data analytics.

DOI: 10.1504/IJTCS.2024.137516

International Journal of Teaching and Case Studies, 2024 Vol.14 No.3, pp.256 - 275

Received: 10 Oct 2023
Accepted: 23 Oct 2023
Published online: 21 Mar 2024 *

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