Webinar reveals the benefits of using technology to meet ESG’s finance requirements.
CFOs have traditionally had less interaction with ESG issues than their counterparts, but are increasingly responsible for the ESG performance of their companies.
In a webinar hosted by CFO South Africa, in partnership with UiPath, David Wray, president of DFCG International Group and ESG lead for the International CFO Alliance, and Margareta Mucibabici, UiPath director of public affairs and social impact, addressed how automation can help CFOs to manage ESG-related responsibilities.
The benefits of ESG information
ESG data can be used to drive better business decisions and make your company more competitive. This data provides a more complete picture of the operating environment and risk exposure that you face as an organisation.
At its best, ESG data gives you insights into how your company’s ESG performance affects its financial performance. This kind of insight can help CFOs to steer their companies towards sustainable growth while avoiding negative externalities.
ESG has risen higher on the finance agenda, but David says the cost of compliance has to be addressed for it to be done effectively. He said, “The burden of compliance is high because regulatory requirements are different, and there’s no mechanism today to connect them all, therefore companies have to reprocess that information and set it up in various formats.”
He gave the example of a bank that operates in multiple jurisdictions. Meeting its various regulatory reporting requirements costs $780 billion per year and between two percent and four percent of a company’s operating expenses, money that could be repurposed for any sort of public good initiative.
ESG data
Margareta said the main challenge for organisations all over the world in their disclosures is ESG data availability and quality. She said deploying technology tools to help tackle that challenge is essential. She said this process needs to be well thought out,- from where to start, how to process the information as well as how to leverage it and make more informed decisions.
David and Margareta signalled that this automation technology can be applied to industries spanning from fisheries to healthcare. David said these machines can give us insights around that data. “Those insights get fed back into the system and offer insights on where to change our behaviour,” he explained.
Keeping people at the heart of automation projects
Margareta said when it comes to collecting and deciphering ESG data, companies need to gather more people with more diverse expertise around the same table. She said, “If we have only automation experts, we might lack the sustainability expertise, which is essential for creating and identifying the best use cases. If we have only the sustainability experts, sometimes they might not know about automation or other kinds of technology.” By facilitating the conversation between these two groups of people, companies can find more comprehensive solutions and find better ways of standardising the elements of each use case, making it easier to deploy automation for future projects.
She said when creating use cases at UiPath, they work with partners across public and private sector departments to understand how they can help them in their own environment and sustainability journey with the help of automation.
She emphasised that automation allows ESG data to be collected without too much of an additional burden on teams: “When you keep people at the heart of your automation projects, you have maximised returns when employees are happier, more engaged and they participate with an open heart in the work that they do day to day. Employees can focus on higher value tasks due to automation software technology.”
There is no better time to start
David said finance leaders shouldn’t wait to start this journey. “Starting right now will help you get a handle on what you have, what you don’t have and need to get – and start thinking about how you bring it into a managed and manageable process.”
He urged CFOs to get involved in providing feedback to regulators on their sustainability standards. “Get active, start telling them the challenges you have, provide them suggestions and ideas so that we can make sure that standards that are set globally are inclusive,” he emphasised.
Both panellists agreed that successful ESG reporting requires a community of people who are passionate about addressing the quality, trust, accessibility around ESG data and being able to put that into decision-making.
