Artificial Intelligence in ESG and Financial Reporting

Abstract Artificial Intelligence (AI) is increasingly becoming an enabling technology for the collection, validation, analysis and communication of environmental, social and governance (ESG) information and financial information. At the same time, expanding sustainability disclosure requirements are increasing the volume, variety and frequency of non-financial information that organisations must manage. This paper examines how AI can strengthen the relationship between ESG reporting and financial reporting by improving data processing, anomaly detection, disclosure preparation, forecasting, risk identification and digital reporting. The study uses a qualitative, descriptive and exploratory research design based on secondary sources, including international reporting standards, Indian regulatory publications and recent academic literature. Particular attention is given to IFRS S1, IFRS S2, the IFRS Sustainability Disclosure Taxonomy, India's Business Responsibility and Sustainability Reporting (BRSR) framework and BRSR Core. The findings indicate that AI can improve reporting timeliness, consistency, scalability and decision usefulness, but its effectiveness depends on data quality, governance, explainability, human oversight, cybersecurity and clear accountability. AI should therefore be treated as a controlled reporting technology rather than an autonomous substitute for professional judgement. The paper recommends an integrated AI-enabled reporting architecture with strong data lineage, model governance, human review, assurance controls and ethical safeguards.