Role of Artificial Intelligence (AI) in Enhancing Impact Investing: A Review of Literature

Abstract

Impact Investing involves investments that generate both financial returns and positive social or environmental impact. Impact Investing has become a vital strategy in the financial industry due to its role in assisting in solving global challenges and promoting sustainability in every aspect of life. This strategy is now using Artificial Intelligence (AI), which is a “technology that enables computers and machines to stimulate human learning, problem solving, and other related activities”. This integration of AI and Impact Investing is changing the impact investing industry. Due to this fact, there is a need for measures to be put in place to address the challenges associated with it to make it sustainable. Therefore, the review helped to obtain a unified data on the benefits, risks, ethical considerations, and risk mitigation and regulation for policy makers and other stakeholders to put together measures in place for improvement and sustainability of the integration. The review employed the five-stage method by Cooper to synthesize the literature on benefits, risks, and ethical issues, as well as risk mitigation and regulation, related to Impact Investing and the integration of Artificial Intelligence.