Using ‘Social Offsetting’ to balance the negative social impact of AI.

We are all familiar with carbon offsetting, but a new addition to the ESG mix is ‘Social Offsetting’.

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Companies are now looking to rebalance their impact around people, communities and society in light of the negative impact of mass job losses, driven by the replacement of workers globally by technology, especially AI.

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Top of the list are manual factory, office and shop workers, bureaucrats, admin staff and any job that requires little skill. But areas like law, finance and medicine are seeing experts being replaced by technology. Additionally, as technology improves workers efficiency, companies can reduce numbers.

In 2013 Carl Benedikt Frey (director of Future of Work) and Michael A. Osborne (Professor of Machine Learning) published a report titled?"The Future of Employment: How susceptible are jobs to computerisation?”. The authors examined how vulnerable over 700 jobs were to computerisation.

[If you want to know if your job is under threat, visit Will Robots Take My Job? www.willrobotstakemyjob.com/ . While 42% of those polled though AI would replace marketing, the AI driven website predicts only 18% will be. By contrast, it predicts 71% of accountancy jobs will be replaced – guess their number’s up!]

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According to Frey & Osborne, they estimated that almost 50% of total US employment were at risk. However, over the following decade, while some of their predictions came true, many didn’t. ?

However, technology is now more advanced than in 2013 and there’s now no debate that AI, robotics and technology will result in a loss of many jobs. Many big companies, like BT, have already made announcements that they are replacing staff with AI. The World Economic Forum believes that almost ‘half of jobs as we know it will be gone in 10 years’ (echoing Fry & Osborne’s belief). But on a more positive note, they believe these will be replaced by new jobs, many not invented yet.

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A national US survey in 2023 revealed that 44% of companies believe AI is likely to replace employees in 2024. 37% said they have already laid off workers because of the technology

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Other economists point to the fact that many job losses will impact upon those at the bottom of the demographic hierarchy and that new jobs will be mainly for the educated middle classes.

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It is likely that technologies will reshape as many jobs as they replace, but either way, the social impact of technology swings both ways, while it delivers many benefits it also creates many negative issues.

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The idea that for every job lost there will be a new job created is not supported by many business thinkers, you only have to look at manufacturing to see it hasn’t happened there.

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Driverless taxis, for example, put lots of taxi drivers out of work with little to no available job alternatives, which then creates a massive social issue, and a negative impact upon local economies. ?The ‘ripple effect’ can be dramatic.

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(See our article on the negative social impact of driverless taxis in California https://mysocialimpact.org/balancing-the-positive-and-negative-social-impact-of-technology-and-what-robotaxies-in-california-can-teach-us )

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Politicians have talked about imposing an AI tax that covers the cost to the State of picking up the new jobless or funding a Universal Basic Income to those who will inevitably end up needing state support. While AI may save a company millions, who really pays?

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Following the model of Environmentalism, the idea of

means a company can offset a negative social impact with a positive one.

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My Social Impact, who deliver ‘Dynamic’ Social Impact Reporting are the leading thinkers in this area.

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Ex Deloitte co-founder, Duncan Hancox commented, “AI is presenting an enormous dilemma to companies as it is inevitable that it will replace many jobs, but shedding staff is never an easy decision to make.”

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By adopting a dynamic social impact strategy, for example, forming partnerships with charities, NGOs and civic groups, Hancox points out that companies can help offset the negative impact with positive initiatives that improves wellbeing and opportunities.

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Fellow director, Marcus Warry points out that Social Impact has become a major focus of the S in ESGs as it becomes more measurable, but also significant to consumers, staff, partners and shareholders. “Good business is not just about reducing environmental impact, that’s important still, but now the focus is on doing good to people, communities and society. No one wants to work for, with or buy from unethical businesses anymore.”

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The march of technology is certainly changing attitudes, social politics and creating mass debate from HR to unions to politicians. Rebalancing the equation is essential for the reputation of companies not wishing to be demonised for being seen as dumping staff for technologies, like AI. As a result, companies need to demonstrate they have a positive social impact strategy in place and not just ignore the consequences.

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'HOW TO SUPERCHARGE THE S IN YOUR ESGS' - a 90 minute lecture & workshop for your staff. It's all about how to develop, improve and deliver an effective social impact strategy, and how to measure that impact. From CSR to Marketing to C-suite, it's an eye-opening, informative and practical session. It will guarantee to change how you think about the S in ESGs and see new opportunities.

It can be delivered face-to-face or via Zoom. ? (There is a small fee.)

Contact me: Chris Arnold [email protected] 07778 056686

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If you want to discuss developing a Dynamic Social Impact Strategy and look at social offsetting, contact Duncan Hancox at MySocialImpact.org

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My Social Impact Duncan Hancox Marcus Warry Dr Chris Arnold