Sectoral Analysis of Environment Social and Governance Data Using Deep Learning Model

The relevance of sustainable practices in businesses is indispensable due to the rising global concerns over climate threats and carbon emissions. Integrating Environmental, Social, and Governance (ESG) factors into business models and operations has become the need of the hour. This radical shift in business operations is propelled by the Sustainable Development Goals (SDGs) set up by the United Nations (UN). The advent of newer technologies, especially Machine Learning (ML) and Deep Learning (DL), has aided firms in data assimilation and evaluating their sustainable practices. However, a notable research gap remains in examining ESG integration in the processes and procedures of corporations through AI algorithms. This is due to the challenges of gathering comprehensive ESG-related data and the need for detailed comparative sectoral analysis. The impact and correlation of ESG scores on a firm’s financial performance have been studied, but a sectoral analysis across the globe needs to be done. The use of ML models for the textual and numerical data accumulation analysis is pertinent. The present study aims to provide a data-driven comparative analysis of three chosen sectors with the help of Artificial Intelligence (AI). This research paper focuses on the environmental domain, as the climate threats and opportunities need an appropriate policy for implementation. This study utilizes the vast repository of ESG disclosure data from the Bloomberg database for the energy, consumer durables, and pharmaceutical sectors, covering global and Indian perspectives for comparative analysis. These three sectors provide pivotal data for addressing sustainability challenges regarding the Climate and Emission categories. The research and interpretation of numerical data are done with the help of the DL model and language model Bidirectional Encoder Representations from Transformers (BERT), which analyzes the textual data from social media. The study highlights the challenges associated with ESG integration among the chosen sectors on a global platform. The findings from this study can contribute significantly to the ongoing sustainability dialogue and policy formulation.