Putting responsible artificial intelligence principles in place is essential to enhancing risk-adjusted
returns and positioning businesses for success, according to a new report by the Canada Pension Plan Investment Board and the World Economic Forum.
It found the use of AI can preserve and even create value for investors. However, institutional investors must find a balance between the speedy adoption of AI and taking a measured approach, since the hasty deployment of AI tools can put long-term value at risk. Indeed, leaving responsible AI guidelines as an afterthought can increase the risk profile of investors.
In the absence of world government regulations, institutional investors must develop their own internal guidelines and continually adapt them as the technology continues to grow, said the report, noting investors have an opportunity to proactively address many stakeholder concerns, such as data breaches, privacy loss, job loss, ethical challenges, misinformation and disinformation. Any potential guidelines should consider these risks and also anticipate and adapt to the emerging legal space as regulation continues to change.
Additionally, it noted institutional investors can conduct assessments with companies and investment partners to see if their views on responsible investing are aligned with their own and that they’re approriate metrics that include responsible AI use as part of their general due diligence practice.
“By championing [responsible AI], [investors] not only help mitigate risks but also unlock opportunities for sustainable growth and innovation,” said the report.
Read: How AIMCo is building a scalable artificial intelligence program