GREEN FINANCE DISCLOSURE QUALITY AND INVESTMENT PERFORMANCE UNDER CLIMATE-RISK REGULATION

Abstract

Artificial Intelligence (AI) is now a part of corporate financial management, which not only enhances the precision of forecasts but also plays a role in strategic decision making. The study in this article analyzes the impact of AI-powered financial forecasting on the quality of decision-making for the Chief Financial Officer (CFO) of medium and large businesses. A comprehensive assessment framework for predicting accuracy, decision consistency, financial risk management, resource allocation efficiency and organizational responsiveness was developed. Different financial performance measures were used to evaluate the performance of AI-based forecasting models against traditional forecasting models. The results highlight the superior predictive accuracy of AI-powered forecasting, its ability to decrease the forecasting error, and the ability of CFOs to make more timely and informed financial decisions. Businesses employing AI forecasting tools excelled in areas such as budgeting, cash flow management, investment prioritisation, and financial risk mitigation. Furthermore, the use of techniques of explainable artificial intelligence (xAI) enhanced the transparency of forecasts generated, and increased managers' trust in the recommendations made by AI. The model monitoring and retraining process additionally contributed to greater forecast reliability in a changing business landscape on a periodic basis. Overall, the study suggests that AI-powered forecasting is a valuable tool for decision-making, supporting financial planning, efficiency, and competitiveness in today's businesses. The framework provides actionable, transparent, and governance-driven suggestions for companies seeking to make the most of AI in corporate finance, safeguarding sustainable outcomes.