https://doi.org/10.1140/epjds/s13688-024-00481-2
Research
Glitter or gold? Deriving structured insights from sustainability reports via large language models
1
University of Trento, Trento, Italy
2
Ipazia S.p.A., Milan, Italy
3
Fondazione Bruno Kessler (FBK), Trento, Italy
Received:
2
November
2023
Accepted:
20
May
2024
Published online:
7
June
2024
Over the last decade, several regulatory bodies have started requiring the disclosure of non-financial information from publicly listed companies, in light of the investors’ increasing attention to Environmental, Social, and Governance (ESG) issues. Publicly released information on sustainability practices is often disclosed in diverse, unstructured, and multi-modal documentation. This poses a challenge in efficiently gathering and aligning the data into a unified framework to derive insights related to Corporate Social Responsibility (CSR). Thus, using Information Extraction (IE) methods becomes an intuitive choice for delivering insightful and actionable data to stakeholders. In this study, we employ Large Language Models (LLMs), In-Context Learning, and the Retrieval-Augmented Generation (RAG) paradigm to extract structured insights related to ESG aspects from companies’ sustainability reports. We then leverage graph-based representations to conduct statistical analyses concerning the extracted insights. These analyses revealed that ESG criteria cover a wide range of topics, exceeding 500, often beyond those considered in existing categorizations, and are addressed by companies through a variety of initiatives. Moreover, disclosure similarities emerged among companies from the same region or sector, validating ongoing hypotheses in the ESG literature. Lastly, by incorporating additional company attributes into our analyses, we investigated which factors impact the most on companies’ ESG ratings, showing that ESG disclosure affects the obtained ratings more than other financial or company data.
Key words: ESG dimensions / Non-financial disclosures / Large language models / In-context learning / Knowledge graphs / Bipartite graph analyses / Interpretability
Supplementary Information The online version contains supplementary material available at https://doi.org/10.1140/epjds/s13688-024-00481-2.
© The Author(s) 2024
Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
