Strategic Focus: AI Governance Controls For Climate Finance Vendors
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Executive Summary
AI is increasingly integral to climate financial data and analytics (CFD&A). Its ability to process complex information makes it well suited to tasks such as accelerating climate related financial disclosures and enhancing climate models with advanced machine learning (ML) techniques. However, given the evolving, incomplete nature of climate data and forecasts, financial institutions must adopt AI cautiously. These institutions operate under strict fiduciary standards and require strong governance and transparent, data driven decision making. ‘Black box’ vendor models, along with risks such as model drift and hallucinations, can undermine these standards. This report outlines key AI applications and common pitfalls in climate finance, and provides governance questions for institutions to raise with vendors during the request for proposal (RFP) process.About the Authors
Felicity Laird
Principal Analyst
Felicity is a Principal Analyst at Verdantix, where she helps financial institutions and technology vendors navigate the evolving climate finance data and analytics landscape....
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Ryan Skinner
Research Director
Ryan is a Research Director at Verdantix, where he leads a team of analysts delivering research, data and advisory services that help clients navigate the fast-evolving landsc...
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