AI Moves From Innovation to Risk: What Retailers Are Documenting in Annual Disclosures

AI Enters the Boardroom Agenda

A study by The Conference Board and ESGAUGE reports that 72 percent of S&P 500 companies disclosed at least one material AI-related risk in their 2025 annual reports, up from 12 percent in 2023. Within those disclosures, reputational risk was cited by 38 percent of companies and cybersecurity risk by 20 percent. These figures show that AI is now being treated as an enterprise risk category, not only as an innovation topic.

Retailers Name Specific AI Risks

Recent filings from several large retailers include explicit language about artificial intelligence.

Target states that “generative artificial intelligence presents emerging ethical issues and could negatively impact our guests and team members.” The company adds that controversial, inaccurate, or ineffective use could harm its reputation and competitive position.

Macy’s includes a section that “AI creates business, legal and ethical challenges,” outlining concerns that include privacy, bias, and intellectual property.

Dollar General describes board-level education and oversight that now includes “various artificial intelligence considerations, including those related to risk management, governance and ethics, and workforce and culture.”

Walmart references investments in technology that include the use of artificial intelligence and generative AI within its strategy and risk discussions in the 2025 annual report.

Taken together, these disclosures show that AI is being addressed alongside other core risks. The language moves beyond general technology references to include ethics, governance, culture, and the impact on customers and employees.

Ethics and Governance Gain Visibility

The shift in reporting reflects a broader industry concern with how AI affects public confidence and compliance. The Conference Board’s analysis highlights reputation and cybersecurity as the most common themes, with legal and regulatory exposure also appearing across filings. Retailers’ language now connects AI to matters traditionally handled at the board or committee level, such as risk management, ethics, and workforce considerations.

A Measurable Change in Tone

What once appeared mainly in product announcements or investor presentations is now formalized in regulatory documents. Risk factors and governance sections are increasingly specific about artificial intelligence. The result is a clearer public record of how retailers are approaching AI, where they see potential, and where they see exposure.

Looking Ahead

Based on current filings, artificial intelligence has become part of the standard risk vocabulary in retail. Companies are documenting potential effects on reputation, data security, compliance, and workplace culture, and they are doing so in language intended for investors and regulators. As annual reports continue to evolve, the industry’s approach to AI is likely to be judged not only by new capabilities, but also by the quality and clarity of its governance.

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