Clause 4.2 of ISO/IEC 42001:2023 requires the organization to determine:

The interested parties that are relevant to the AI Management System.

The relevant needs and expectations of these parties.

Which needs and expectations become compliance obligations.

"Interested parties" include both internal and external stakeholders, such as customers, regulators, suppliers, society, and NGOs. These parties may have expectations related to environmental impact, ethics, privacy, fairness — and increasingly, climate change initiatives.

Option A is correct because ISO/IEC 42001 recognizes environmental and sustainability-related expectations as part of societal or stakeholder concerns, especially under responsible AI governance.

Option B is incorrect because regulators and legislators are external, not internal parties.

Option C is misleading — organizations must assess and formally determine relevant needs and expectations, not at their discretion but in alignment with ISO/IEC 42001 Clause 4.2.