Decoding AI Disclosure Report

The research, titled "Decoding AI Disclosure," provides a comprehensive analysis of AI-related statements in the annual and sustainability reports of the 50 largest companies in the STOXX Europe 50 Index. 

The study highlights that while many companies are making strong disclosures about their AI use and application, significant gaps remain in critical areas of governance. These gaps include AI policy, risk management, oversight, audits, and key performance indicators (KPIs). The report underscores the importance of transparency in AI practices and the need for improved governance. 

Here are some key findings:

• AI Strategy and Usage: All companies (100% of those who took part in the survey) provided some information on their AI strategies and 84% shared specific AI use cases. This indicated a strong recognition of the importance of demonstrating preparedness for the future of AI.
• Gaps in Governance and Risk Management: Only 46% of companies disclosed Board oversight of AI, 40% reported on risk management frameworks and 38% on AI policy. These aspects were crucial for addressing AI's potential risks and showcasing how leadership navigates AI-related decisions.
• Inconsistent Governance: There were notable inconsistencies in governance. Some companies showed strong governance in certain areas but had significant gaps in others, such as a lack of Board oversight on AI policy decisions or unclear senior leadership responsibilities related to AI.
• Sector Comparisons: Sectors at the forefront of AI innovation and risk management, such as technology, media, and telecommunications, were more likely to report on leadership roles, knowledge development, and key performance indicators (KPIs). In contrast, banks, insurance, and financial services companies focused more on risk management and knowledge development, aligned with their regulatory responsibilities.

AI Strategy and Usage in Ireland

• AI Strategy and Usage: In Ireland, 70% (of those who took part) of companies reported on their AI strategy in some form and 50% disclosed information on AI usage. Although these figures are below the European average, they reflect a strong acknowledgement of AI's growing importance to business operations.
• AI Governance: No Irish companies disclosed having an AI policy, but 40% addressed AI risk management, aligning with the European average and indicating a positive awareness of AI's challenges.
• Oversight and Metrics: 30% of Irish companies disclosed board-level oversight of AI, which is relatively robust. However, there was a significant gap in senior leadership oversight and key performance indicators, with no companies reporting on these categories.

Click here to read the full report.         

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