Enhancing Sustainable Finance Advisory and Literacy Through AI-Based Personalization

Sustainable finance (SF) is an emerging discipline at the intersection of finance and sustainability. It encompasses factors, activities, and organizational policies that serve to further societal goals in any of the sustainability dimensions (i.e., environmental, social, or governance). Recent studies on the topic have pointed to a lack of consensus on a single definition of SF while highlighting, instead, the various dimensions and activities that constitute the SF ecosystem. The scope of this field has also evolved to include new developments such as alternative datasets and emerging technologies (e.g., big data and artificial intelligence). In this chapter, we review recent studies in SF to highlight two important gaps that merit urgent attention. First, the role of individual stakeholders and their motivations to participate in SF remain understudied, even though this is critical for both organizations and policymakers. Second, the current literature focuses predominantly on investors as individual stakeholders, while ignoring other roles such as analysts, policymakers, academics, and the general public. We believe that a systematic study of how SF-related knowledge can be delivered as part of advisory or literacy programs in a personalized fashion can be of timely importance to the field. To this end, a combination of artificial intelligence (AI) and behavioral science techniques can offer a solution. We highlight a prototypical design of an AI-based advisory and literacy tool that can acquire, personalize, and deliver targeted SF information to users to boost their awareness and understanding of salient topics, and consequently enhance their confidence and intention to participate in SF.