Season 3 of the FSI Deep Dives continued with our second panel on February 21st, when we reconvened at the Deloitte Tower to discuss how corporate sustainability benefits from AI and Big Data.
Two panelists led the discussion, the first being Catherine Jacques-Brissette, Corporate Responsibility and Environment Specialist at Bell Canada. Catherine also chairs the Climate Change and Sustainability Committee at the Canadian Institute of Actuaries. Our second panelist was Bassem Monla, Artificial Intelligence Subject Matter Expert at IBM Quebec and the Business Development Manager for Smart Cities. The panel was moderated by Gildas Poissonnier, Senior Manager, Sustainability and Climate Change at Deloitte, and an FSI Board member.
Catherine Jacques-Brissette began by presenting the Actuaries Climate Index. Four North American actuarial organizations, including the Canadian Institute of Actuaries, created the index primarily for the purpose of informing actuaries about the impacts of climate change in different regions of Canada and the US, as well as providing a public education tool. The Actuaries Climate Index measures the evolution of climate related extremes, relative to a 30-year reference period over time using the following 6 data sets:
- high temperatures,
- low temperatures,
- heavy rainfall,
- drought (consecutive dry days),
- high wind, and
- sea level.
The index clearly shows that the frequency of climatic extremes has increased in the last 30 years compared to the reference period and allows actuaries to consider adjustments to actuarial calculations. Catherine also presented a second, soon-to-be-available index called the Actuaries Climate Risk Index. This measures the correlation between the weather extremes and economic and human losses. Eight years in the making, these indices are the first of their kind in the world used in the insurance industry. There is interest in Europe for the creation of similar indices for the region. Download Catherine’s presentation or check out the indices at the Actuaries Climate Index.
For the second half of her presentation, Catherine talked about Bell Canada’s use of digital technologies in telecommunications and their efforts to quantify the environmental impact of the greater use of telecommunication products. By expanding its service offerings to include web conferences, e-learning, streamed TV and e-payments, Bell saw an increase in its carbon footprint related to telecommunication energy needs. Bell wanted to understand if this increase was offset by the reduction in its clients’ emissions related to a decreased need for transport, raw materials, production facilities, and cutting down on paper waste, the so-called “dematerialisation” of modern living. After lengthy research on lifecycle carbon emissions using large quantities of data about the displaced products, Bell was able to conclude that the net impact of the shift was positive for the environment. Furthermore, Bell is involved in many other initiatives intended to minimize its environmental impact in both its own operations and their customers. Read more in the BCE Corporate Social Responsibility Report
Next, Bassem Monla provided us with a technical overview of AI and machine learning, and the role that AI and Big Data will play in the future. He discussed the difference between the computing of the past and the AI of the future, enabled by the new availability of vast amounts of data. He explained the differences in the three types of machine learning (unsupervised, supervised, and reinforcement) and presented examples of current use. For instance, AI and machine learning have already increased diagnostic accuracy, helping dermatologists recognise melanoma, having been “taught” by analysing large data sets of previously identified images in a supervised learning environment. Reinforcement learning, where the machine teaches itself through trial and error (creating its own data set to learn from) is in its early days in terms of commercial application but has huge potential. The business world is changing as AI and machine learning provide unprecedented amounts of data from which AI can extract insight to new business opportunities or better understand risks. Download Bassem’s presentation.
The Q&A, while touching on a number of topics, brought the session back to its central question: how can AI and Big Data work to encourage sustainable investing? One need only think of potential applications such as optimizing the use of resources, helping deploy teams during disasters, smart building using less energy, etc. With respect to the Actuaries Climate Index, one participant brought up the idea of using AI to introduce a predictive function into the index. AI and Big Data already offer an enormous array of potential applications, and one can only imagine what could be accomplished if they were put to work to the benefit of planet and people.
Many thanks to the panel experts and to our event sponsor: Deloitte.