Behind the decision to embrace digital transformation is mostly the motivation to attain business process efficiency and workflow optimization. Small, mid-size, or large-size. Young or old. Enterprises only wish to make money, whether by innovating and making more, or streamlining operations and cutting down unnecessary losses.
One might think that transforming digitally only enables the latter. What else are we to infer from the Automation in Robotic Process Automation (RPA)? RPA “bots” are structured, rule-based programs that automate manual, repetitive tasks, like extracting data from a lead-capture form.
The goal is to emulate human actions. And RPA bots do it very well. In fact, in very particular applications, they indeed excel. Unlike human beings, whose decisions are influenced by variable factors like mood and sleep, RPA bots can create value without complaining, without taking a break, and, if programmed well, without making a mistake.
Digital enterprises, however, create value in more than one way. Of course, process automation eliminates inefficiencies, errors, and bottlenecks, cutting down on staggering losses, especially in a large-scale enterprise. But by precisely doing that, it makes more time for a workforce to focus on strategic and creative initiatives; it also creates value by encouraging innovation.
That said, there is a third way RPA creates corporate value. It enables accurate and streamlined ESG reporting.
What is the importance of ESG and ESG reporting?
Today, maximizing profit and shareholder value is not enough. More investors want to invest in businesses that grow sustainably. They want to develop portfolios that reflect their values on climate change, human rights violations, and fair and ethical leadership.
That is what a corporation’s ESG performance refers to — the Environmental, Social, and Governance, or ESG value it creates. The higher the performance, the higher the value, and hence the more sustainable and profitable (in the long run) it is deemed.
There are umpteen ways enterprises today create ESG value. Here is a neat chart that illustrates a few of them.
Like financial reporting, enterprises now also engage in ESG reporting. They disclose data outlining the ESG value they have created and the ESG value they plan to create.
It is not hard to realize why ESG reporting is so critical. The data corroborates ESG performance and sustainable ambitions for the future. Given the steady rise in responsible investors and investments — $50 trillion by 2025, as per Bloomberg — its importance from here will only increase.
But here is the problem: we lack a robust ESG reporting framework — a set of rigid and standardized ESG reporting guidelines that clearly distinguish enterprises that create true ESG value from enterprises that exploit the ambiguity.
Read more: “Greenwashing” Is Misleading ESG Investors – Understanding the Gray Areas
And that is where RPA steps in.
Building a robust ESG reporting framework with RPA
Every year, Enterprise Strategy Group (ESG) conducts its annual technology spend intentions survey.
Last year’s survey, published in May, involved 658 senior IT decision-makers belonging to both mid-size and large-size enterprises, across North America and Western Europe.
Of all the respondents, only nearly one-third reported using RPA to automate tasks to enhance productivity. Especially (33%) enterprises not older than 10 years, as they have less legacy infrastructure and established workflows to deal with.
The report divided the participating enterprises into three groups.
- Not on the roadmap: Enterprises that do not plan to transform digitally.
- Early-stage: Enterprises that have identified their digital transformation goals but are yet to take, or are in the process of taking, the initiatives to achieve them.
- Mature: Enterprises that have not just identified their goals but have also researched, planned, and implemented the technology to achieve them.
Source: Enterprise Strategy Group
According to the report, mature enterprises implemented RPA initiatives more significantly. Although, what is interesting is that not only were mature enterprises technologically ahead, but their advantage was accelerating. Just how money makes more money, advances in technology lead to more advances.
What does that mean?
It means that mature enterprises do not just enjoy simple benefits like process automation, but also bigger, more high-value benefits like forecasting.
How?
Because they have already entered the next phase of their digital transformation: intelligent automation — machine learning and AI-integrated RPA solutions.
The question is, what does that have to do with building a robust ESG reporting framework?
The biggest challenge to building a framework is making sense of the virtually limitless data that defines ESG performance. And that is where AI-integrated RPA shines. It is much more capable of processing and analyzing large data sets than RPA alone.
Here is another way to put it.
Intelligent automation enables enterprises to produce richer, more accurate insights. And since the framework is based on more accurate insights, it is also more reliable at measuring ESG performance and value and identifying future risks and opportunities, something that is at the core of ESG investing.
Read more: Think RPA Will Transform Your Business? Wait Till You Combine It With AI
Add in the efficiency of automation, and you have ESG reporting of the highest quality.
- Communication: The primary goal of ESG reporting is to maximize communication value. Intelligent automation ensures that engagement between investors and corporations is active, streamlined, and clear.
- Learning: Clear, measured communication, through discrete parameters or KPIs, makes for measured learning of future risks and opportunities.
- Governance: Trust and agreement on ESG policies are absolutely critical, from board executives to market analysts. Accurate digital documentation ensures transparency, which promotes trust.
When you think about it, ESG reporting doesn’t just help build private value. It also helps build public value.
This is value for everyone.
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