Europe’s largest companies embrace AI disclosures, but governance gaps remain

The study shows strong AI disclosures on its use and application throughout the organisation, which highlights its integration and value. However, the findings reveal significant gaps in critical areas of governance, including AI policy, risk management, oversight, audits and key performance indicators (“KPIs”).

The report, Decoding AI Disclosure, is a comprehensive analysis of the AI-related statements in the annual and sustainability reports of Europe’s 50 largest companies in the STOXX Europe 50 Index — a blue-chip index comprising sector leaders in Europe. The study examined the companies’ AI statements across 10 categories, including AI Policy, Board Oversight, Senior Leadership, Knowledge Development, Audits, Strategy, Risk Management, KPIs, AI Usage and AI in Chair or CEO Statements.

Eight companies reported at least eight of the 10 identified categories of AI transparency, placing them among the top disclosers in Europe: Allianz, AstraZeneca, Deutsche Telekom, GSK, Mercedes- Benz, Prosus, RELX and Zurich Insurance.

“Disclosing AI activities in annual reports is a powerful way for companies to show they are adapting to the AI revolution,” said Niamh O’Brien, a Senior Consultant in the Strategic Communications segment at FTI Consulting. “This research provides valuable insights into how companies are communicating on their AI initiatives and the steps they are taking to govern its use. Some companies are setting high standards by tracking their progress through performance indicators and audits, which will be an important trend to watch in the years ahead.”

Daniel Malan, Assistant Professor in Trinity Business School and Director of the Trinity Corporate Governance Lab, commented: “This research provides valuable baseline information about AI disclosure,” said . “We look forward to continuing our collaboration with FTI Consulting and to report on future progress as companies settle into the new regulatory context provided by the EU AI Act.”

Key Findings:

• Comprehensive AI Strategy and Usage Disclosure: All 50 companies provided some information on their AI strategies, with 42 sharing specific AI use cases. This highlights that companies understand the importance of demonstrating their preparedness for the future of AI.

• Gaps in Governance and Risk Management: Twenty-three companies provided disclosure on board oversight, while 20 reported on risk management frameworks and 19 on AI policy. These are fundamental aspects to address AI’s potential risks and essential for companies to showcase how leadership navigates AI-related decisions.

• Inconsistent Governance: Some companies demonstrated strong governance in one area but showed surprising gaps in others, such as a lack of board oversight on AI decisions or their senior leadership’s responsibilities related to AI.

• Sector Comparisons: The sectors at the forefront of AI innovation and risk management, such as technology, media and telecommunications, were more likely to report on the role of their leadership, knowledge development and KPIs. Banks, insurance and financial services companies focused on risk management and knowledge development, which aligns with their regulatory responsibilities.

Arnaud Cave, a Director in the Strategic Communications segment at FTI Consulting, added, “Companies should close the gap between strategy, usage and governance, providing transparency on material risks and how these are mitigated. Comprehensive disclosure on AI is no longer a nice to have, but something investors actively seek assurances on from companies.”

The report includes best practice examples and 10 recommendations for companies looking to enhance their AI reporting, three of which include documenting board oversight on AI-related activities, establishing robust KPIs complemented by qualitative insights on AI deployment and providing detailed use case examples grouped by impact or function, illustrating value creation and risk management.

Read the report on Trinity Business School website.