AI – A Tool for Assessing the Sustainability of Urban Businesses

The rapid growth of urbanization and tightening ESG reporting obligations place urban businesses under increasing pressure to adopt robust sustainability assessment tools. This paper examines the potential of artificial intelligence (AI) as an instrument for evaluating urban business sustainability across environmental, social and governance (ESG) dimensions. The research draws on a systematic literature review of studies published between 2019 and 2024, combined with empirical data from the S&P Global Corporate Sustainability Assessment (CSA) 2024, covering approximately 13,000 companies across 62 industries. Results show that AI adoption significantly improves ESG performance, with the strongest effects on the environmental dimension. According to the 2024 CSA, the most common AI applications target energy consumption optimization (36% of companies), customer relations (31%) and product quality (26%). However, 48% of responding firms lack a dedicated AI governance policy. The global AI in ESG and sustainability market reached USD 182.34 billion in 2024 and is projected to grow to USD 846.75 billion by 2032 (DataM Intelligence, 2024). The paper concludes with recommendations for urban businesses and policymakers on integrating AI into ESG reporting systems in line with the EU Corporate Sustainability Reporting Directive (CSRD).
Keywords: artificial intelligence, urban sustainability, ESG assessment, machine learning, CSRD