The Bank for International Settlements has successfully completed proof-of-concept testing for Project Gaia, an initiative in collaboration with three central banks aimed at utilizing natural language processing, optical character recognition, and machine learning to extract climate-related data from corporate reports.
In partnership with the European Central Bank, Deutsche Bundesbank, and the Bank of Spain, the project’s report highlights how Gaia effectively navigated the variations in definitions and disclosure frameworks across different jurisdictions, facilitating easier comparisons of climate-related financial risks.
This proof of concept represents a significant advancement by employing large language models (LLMs) to automatically extract indicators such as total emissions, green bond issuance, and voluntary net-zero commitments from publicly available corporate reports.
The project partners believe that Gaia’s adaptable design could serve as a framework for AI-enabled applications across a wider array of use cases for central banks and the financial sector.
Pablo Hernández de Cos, governor of the Bank of Spain, remarked, “Project Gaia is an important breakthrough on the road to the understanding and adaptation of AI into the innovation culture of the Eurosystem. The potential applications and synergies of this tool are nearly limitless.”