The EU Sounds The Clarion Call On Artificial Intelligence Regulation

Corporate Governance Environment, Health & Safety ESG & Sustainability ESG Performance Improvement Operational Excellence Smart Buildings Strategic Focus

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Executive Summary

Given the proliferation of artificial intelligence (AI) technology across business functions, the EU developed a consolidated, formalized approach to AI regulation for users and developers within the EU. The regulation was adopted in April 2021 and aims to harmonize existing laws and future proof safe AI development. In this report, we help risk management and compliance executives as well as heads of functions shield against AI risk, by offering an overview of the current AI regulatory landscape, breaking down compliance requirements and proposing mitigation strategies for different risk profiles and levels. 

Table of contents

EU Artificial Intelligence Act Will Be The Dominant Regulatory Framework Going Forwards 
The Current AI Regulatory Landscape Is Complex, Fragmented And Evolving
The Proposed Regulation Aims To Harmonize Existing Laws And Future Proof Safe AI Development
The Regulation Will Create Obligations For Both Developers And Users Of AI

Firms Developing And Deploying High-Risk AI Systems Will Be Subject To Stringent Auditing And Review Processes 
Firms Must Allocate Greater Resources To Manage AI Risk
Developers Should Prepare For An Oncoming Wave Of AI Regulation

Table of figures

Figure 1. AI Innovation Is Top Of Mind For Global Real Estate Executives  
Figure 2. AI Systems Most Relevant To The Private Sector Affected By The Regulation 
Figure 3. Obligations Of Providers Of High-Risk AI Systems  
Figure 4. Firm Profiles And Associated Risk Level  
Figure 5. Comparison Of Passive, Active And Proactive AI Risk Management Approaches For Medium And High Risk Firms  
Figure 6. AI Adoption Rates And Risk By Business Function 

About the authors

Christopher Sayers

Senior Analyst
Chris is a Senior Analyst in the Verdantix EHS practice. His current research agenda focuses on EHS software, product compliance software and digital mental health and wellbeing solutions. He was also the lead author of the most recent Verdantix EHS Software Green Quadrant benchmarking study. Chris joined Verdantix in 2020 and has previous experience at EY, where he specialized in robotic process automation (RPA). He holds an MEng in Engineering Science from the University of Oxford, with a concentration on machine learning and machine vision.

Victor Voulgaropoulos

Senior Analyst

Victor is a Senior Analyst in the Verdantix Operational Excellence practice. His research agenda focuses on asset management solutions and their overlap with industrial risk management technologies and digital twins. His advisory portfolio includes go-to-market, growth strategy, commercial due diligence and digital strategy projects for corporates, vendors and investors. Prior to joining Verdantix, Victor was a research associate at Imperial College London and Massachusetts Institute of Technology, providing engineering advisory services for clients in the energy industry (oil & gas, nuclear and solar). Victor holds a PhD in Process Engineering from University College London.

Hugo Fuller

Industry Analyst
Hugo is an Industry Analyst in the Verdantix Operational Excellence practice. His current research agenda explores the technologies within the industrial asset management software market, with a focus on enterprise asset management software and computerized maintenance management systems. In Advisory, he focuses on go-to-market, thought-leadership and market-sizing work. Prior to joining Verdantix, Hugo worked in PR analytics and studied English at University College London.

Ben Hext

Industry Analyst

Ben is an Industry Analyst in the Verdantix Smart Buildings practice. His current agenda covers hardware and software solutions for energy management, on-site power generation, and COVID-19 mitigation management. He holds an M.Eng in Mechanical Engineering from Durham University,

Rodolphe d’Arjuzon

MD and Global Head of Research
Rodolphe co-founded Verdantix in 2008 and directs the firm’s research strategy across all practice areas. Rodolphe has over 20 years of experience in technology research and strategy consulting. He previously worked for Barclays Bank and L.E.K. Consulting. Rodolphe holds a PhD in Physics from the University of Cambridge.

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