Reputation, Security, Compliance: The Surge of AI Risk Disclosuresh2>
The integration of b>artificial intelligence (AI)b> into business operations is rapidly increasing, bringing with it a host of associated risks. A significant shift in the landscape of corporate disclosures related to AI has been observed over the past two years.p>
Current Trends in AI Risk Disclosuresh3>
Two years ago, only b>12%b> of S&P 500 companies reported a material risk related to AI in their public disclosures. Fast forward to b>2025b>, and this figure has surged to b>72%b>. This six-fold increase reflects not only the growing adoption of AI technologies but also the escalating concerns surrounding their implementation.p>
A recent report by The b>Conference Boardb> and data analytics firm b>ESGAUGEb> highlights this trend, tracking b>Form 10-Kb> filings from S&P 500 companies through August 15. In b>2024b>, b>58%b> of these companies reported at least one AI-related risk.p>
Key Concerns Identifiedh3>
According to Andrew Jones, principal researcher at The Conference Board, the central theme emerging from these disclosures is a growing concern about AI’s impact on b>reputationb>, b>securityb>, and b>complianceb>. He emphasizes the need for business leaders to integrate AI governance with the same rigor typically applied to finance and operations while ensuring clear communication to maintain stakeholder confidence.p>
Common Risks Reportedh3>
For companies aiming to mitigate AI-related risks, it is essential to understand where the risks lie:p>
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li>b>Reputational Risks:b> Cited by b>38%b> of companies, these risks include issues related to implementation, consumer-facing AI, and privacy and data protection.li>
li>b>Cybersecurity Risks:b> Reported by b>20%b> of companies, these include AI-amplified cyber risks, third-party and vendor exposure, as well as data breaches and unauthorized access.li>
li>b>Other Risks:b> These encompass evolving regulations and uncertainties, intellectual property concerns, business performance and competitive risks, compliance and enforcement issues, hallucinations and inaccurate outputs, and ransomware and malware threats.li>
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Industry Sectors at Riskh3>
As of 2025, four sectors have reported substantial AI-related risks:p>
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li>b>Financials:b> b>63b> companies disclosed risks, primarily tied to regulatory and reputational issues concerning sensitive data.li>
li>b>Industrials:b> b>48b> companies are dealing with risks associated with scaling automation and robotics.li>
li>b>Information Technology:b> b>48b> companies are central to AI development, facing unique risks.li>
li>b>Health Care:b> b>47b> companies confront regulatory and reputational risks relating to fairness and data sensitivity.li>
ul>
Conclusionh3>
The rise in AI risk disclosures signals a pivotal moment for companies as they navigate the complexities of integrating AI into their business models. Understanding these risks and taking proactive measures will be crucial for maintaining reputation, security, and compliance in an increasingly AI-driven landscape.p>
