AI Human Impact and Environmental Social Governance are both humanist investment strategies investigating nonfinancial criteria, but AIHI updates for, and focuses on data-driven enterprises.
Premise: ESG criteria are well suited to traditional companies in the industrial economy, but not AI-intensive companies in the digital economy: navigating the unprecedented economic powers, social effects, and ethical dilemmas rising along with AI requires novel categories for evaluation.
Environment
Environmental effects are the topline concern for ESG investors, but AI companies don’t typically produce toxic waste on an industrial scale, strip-mine the earth, or clear-cut forests. Environmental ratings connect only tenuously to facial recognition technology, to healthcare algorithms filtering electrocardiograms for abnormalities, to romance websites promising partners.
Privacy
Industrial organizations have little interest in consumers’ personally identifying information: Ford Motor Company initially promised customers they could have any color they wished, as long as it was black. Homogenization was the key to industrial economy success, and ethical dilemmas – along with ESG responses – followed in kind. Contrastingly, AI runs on personalization. Netflix does not aspire to produce generic movie recommendations for homogenized demographic groups, it aims specific possibilities toward individual viewers at targeted moments. The burgeoning field of dynamic insurance does not cover population segments over extended durations, it customizes for unique clients and intervenes at critical junctures. AI healthcare is less concerned with a patient's age group than with tiny and personal heartbeat abnormalities that escape human eyes but not machine learned analysis.
In the industrial, ESG economy, personally identifying and distinguishing information is ignored, even suppressed. In the AI economy it is obsessively gathered and leveraged. Because everything is about individuals and their unique data, the human impact of privacy decisions goes from being an afterthought to a primary concern.
AIHI applies only to companies functioning with AI at the core of their operation.
ESG applies broadly across the economy.
AIHI accounts for humanity in the digital world.
ESG accounts most effectively for humanity in the industrial world.
AIHI categories of evaluation derive from academic AI ethics.
ESG categories of evaluation derive from UN Sustainable Development Goals.
Short White Paper: Why Traditional ESG Does Not Work for AI