Companies are hyping AI the same way they talked up sustainability, but there are ways to fix that

Overhyped AI Claims:
Companies often overstate AI capabilities, misleading investors and stakeholders. This “AI washing” parallels the past trend of greenwashing in sustainability efforts.
Lack of Standardization:
Unlike the ESG standards, AI ethics principles lack standardization. Over 200 sets of AI guidelines exist, with the U.S. relying on fragmented and mostly voluntary rules.
No Compulsory Impact Assessments:
Unlike sustainability principles that require companies to evaluate material impacts, there’s no requirement in the U.S. for assessing and disclosing AI’s material impacts on businesses, shareholders, and the public.
Third-Party Verification Shortfalls:
Unlike ESG principles, which benefit from third-party verification, AI claims lack consistent audit standards, making it hard to compare outcomes.
Weak Enforcement:
There’s insufficient robust enforcement in AI, unlike ESG where legal liabilities and penalties have driven compliance. Without meaningful enforcement, businesses can exploit AI washing as a low-cost, high-benefit strategy.

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