ESG and Technology
One of the most significant challenges facing companies today is their need to integrate environmental, social and governance (ESG) principles into their operations.
Organizations must increasingly address the main elements under the ESG framework, including environmental issues such as climate change impact and energy usage; social issues such as inclusion and equity; and governance issues such as accountability and transparency. With intelligent automation (IA), those adherences are not only possible but transformative.
What Is ESG?
ESG, or ‘environmental, social, and governance’ refers to the three key factors measuring the sustainability and societal impact of a company or business.
ESG metrics are becoming increasingly important, and companies unable to keep up will face mounting pressure. Regulators in the European Union and the U.S. are increasing their oversight of ESG metrics, and investment in ESG reporting is central among leader discussions.
However, ESG integration cannot be achieved without the right technology adoption. Digital transformation is critical in driving the ESG agenda. As ESG considerations become more relevant in the business world, companies will turn to intelligent automation (IA) technologies like robotic process automation (RPA) and process intelligence to improve their ESG performance, helping them become greener and more sustainable.
A 2022 Gartner, Inc. survey reveals that 87% of business leaders expect to increase their organization’s investment in ESG and sustainability goals over the next two years."Gartner
What Are the Other Technologies That Can Support ESG?
Process intelligence, RPA, and IA cloud services are huge performers in the ESG technology space.
Firstly, it’s important to note intelligent automation (IA) is a cognitive technology linking artificial intelligence (AI), machine learning (ML), and RPA, among others, to enable the expansion of automation capabilities. While AI is the simulation of human thinking, RPA mimics human action.
But to realize the full potential of your automation journey, you first need to look at where to automate and how. And to do that, you’ll need process intelligence.
Process intelligence is cutting-edge technology that uses data from business systems to gain insights into organizational processes and identify areas for improvement. It connects the best aspects of process mining, task mining, and business intelligence to help you achieve process optimization.
Process Intelligence can play a crucial role in promoting ESG principles in a company's transformation journey. It detects process irregularities and highlights the root cause, which then helps RPA develop an automated solution to remove or drastically lower human intervention. When RPA takes over these tasks, it simplifies business processes, increases efficiency, and digitizes processes to reduce manual labor.
SS&C | Blue Prism® Process Intelligence (BPPI) helps you get the most out of your IA and RPA. BPPI identifies the best processes to automate and how to reach peak performance to elevate customer and staff experiences, save money and resources and maintain compliance.
The Role of Technology in ESG
To become a carbon-neutral organization and address climate risks like greenhouse gas emissions, organizations must consider the impact on existing employees, alignment with their overall organizational strategy, and current energy consumption. Tools such as BPPI can help organizations understand their process flows and how they apply to the frameworks for ESG goals, making them easier to achieve.
For example, by identifying process bottlenecks, such as supply chain slowdowns, and digitizing and automating critical, error-prone, and repetitive processes, companies can streamline their operations and reduce their carbon emissions.
Process intelligence also helps identify instances where customers are mistreated and locate potential conflicts of interest so organizations can address these issues promptly. This is a step toward building trust in the long term. This can improve the organization’s overall reputation, which then positively impacts ESG performance.
Streamlining ESG data, automating processes, increasing data quality and data governance together form the basis of transparency in regulatory reporting.
Process intelligence techniques identify areas for automation, where frequent monitoring is needed to provide full transparency, audit trails, and compliance adherence in near real-time. As a personal note, I think we will see the regulators significantly increase their requirements and tests in the ESG disclosure space within the next 12 months!
80% of business leaders are seeing sustainability help their organization optimize and reduce costs according to a 2022 Gartner survey."Gartner
Benefits of Automation in ESG
In addition to the above, automation benefits organizations with:
- Increased efficiency: RPA automates repetitive, time-consuming tasks, freeing employees to focus on higher-level tasks and consequently reducing the carbon footprint of a process.
- Cost savings: Increased efficiency enables cost reductions — this might be in the time to service a client, a reduction in customer-related inquiries, or reduced human intervention in a process.
- Access to more data points: Since RPA can access almost any system with a UI, it offers greater access to many more data points.
- More accurate data: RPA also performs these tasks with high accuracy, reducing errors and improving data quality.
- More timely and scalable: RPA works 24/7 to collect more timely data regularly and, depending on requirements, it can be scaled up or down to allow businesses to adapt to changing market conditions.
What are some examples of ESG?
- A U.S.-based energy company uses digital workers to automate water sample testing, reducing harm to the environment.
- One of the largest truckload carriers in North America uses digital workers to develop maintenance schedules for each of their vehicles based on information gathered from sensors, ensuring the vehicles avoid breakdowns and achieve their deliveries efficiently.
Carbon Footprints: Humans vs. Digital Workers
It’s also worth noting that an SS&C Blue Prism digital worker can have a lower carbon footprint than a human worker for several reasons:
Energy consumption: Digital workers typically require less energy to perform tasks than human workers. While humans need to eat and drink to maintain their energy levels, digital workers run on electricity. Moreover, modern computers and servers are becoming increasingly energy-efficient, which further reduces their carbon footprint – especially if they’re delivered from the cloud.
Transportation: Human workers often need to travel to and from their workplace, which contributes to their carbon footprint. In contrast, digital workers don’t require transportation since they’re usually located on servers that are already in place.
Waste production: Human workers produce waste in the form of food packaging, disposable cups, and other items consumed during work hours. Digital workers don’t produce such waste.
Working hours: Digital workers can operate for much longer periods than human workers, so they’re more efficient for longer. Plus, they work with greater accuracy. That means more work can be done in the same amount of time and with fewer errors or reworking.
Overall, these factors contribute to a lower carbon footprint for digital workers compared to human workers.
ESG Compliance and Automation
In combination, process intelligence and RPA can significantly impact a company's ESG performance. By automating and optimizing processes, companies can reduce waste, improve energy efficiency and reduce their environmental impact.
Additionally, by freeing employees to focus on higher-level work, companies can foster a more engaged and motivated workforce, improving their social impact.
We want to hear your thoughts on this and what you’re doing in the ESG space.