AI-Powered ESG and Navigating Regulatory Challenges, Ethical Risks, and Opportunities in Green Investment Law

The algorithm incorporation of artificial intelligence into the system of Environmental, Social and Governance (ESG) may be viewed as a radical shift in the sustainable financial field, including the jurisdictional and contractual one in green investment law. AI-based applications support advanced processing of data, predictive analytics, and real-time monitoring, which are useful in improving the evaluation of ESG risks, identifying cases of greenwashing, automating compliance with new regulatory tools such as the Corporate Sustainability Reporting Directive (CSRD) and the AI Act and allocating capital to low-carbon initiatives more efficiently. Such technical abilities are offering investors the opportunity to meet high levels of risk-adjusted returns in addition to their further development towards broader sustainability targets, such as the achievement of net-zero transitions and the United Nations Sustainable Development Goals.