The Role Of Factory Automation In ESG Compliance

What Is ESG? 

ESG stands for Environmental, Social and Governance – three key factors used to measure the societal impact and sustainability of a business or organisation. ESG metrics are gaining in importance, with companies facing mounting social pressure to comply with evolving regulations. Regulators in America and the European Union are increasing their oversight in this area, so there’s a strong focus on investment in ESG reporting.

The challenge facing companies today is to address these key factors of the ESG framework. You’ll be looking at: 

• Environmental issues, including energy usage and climate change impact 

• Social issues, including equity and inclusion

• Governance issues, including transparency and accountability

Most organisations are still using a time-consuming and error-prone approach to comply with ESG regulations. This means a manual process of data collection, analysis and reporting, with all its attendant risks. High volumes of raw data are often still processed by dispersed team members, using outdated and unspecialised tools like spreadsheets and calculators. Without a centralised intake point and streamlined digital processing, there’s no single source of truth, resulting in a risky and inefficient workflow. 

However, the tech-driven advances of Industry 4.0 are introducing new methods of keeping up with ESG compliance. Intelligent automation (IA) makes compliance not only possible but will transform your whole operation. Adopting appropriate technology like digital processing solutions is therefore crucial to the ESG agenda. 

What Technologies Support ESG Compliance?

As the pressure rises on ESG considerations, many companies will be considering IA technologies to improve their performance. These include process intelligence (PI), IA cloud services and robotic process automation (RPA) strategies that can help businesses become greener and more sustainable. 

It’s important to distinguish IA from AI (artificial intelligence), which simulates human thinking. AI is only one of the factors contributing to IA, along with machine learning (ML), RPA, etc. Taken all together, this cognitive technology is able to expand factory automation capabilities. 

Process intelligence is another way to describe big data and its analysis. It takes data collected from various business software systems such as Enterprise Resource Planning and Customer Relationship Management. It then uses this data to analyse your organisational processes, to find areas for potential improvement. PI detects process irregularities and identifies their root cause, which is often human error. It then works with RPA to deliver an automated solution that drastically reduces human intervention – even removing that factor altogether. 

Technology’s Role In ESG Compliance 

Environmental

To address climate threats like greenhouse gas emissions and become carbon neutral, you’ll have to take into account your current energy consumption. You will also need to assess the impact of ESG compliance on existing employees and how compliance aligns with your overall business strategy. Data collection and analysis tools like PI can help you understand your process flows and how they can fit into the ESG compliance framework, making environmental targets easier to achieve. For instance, you can identify process bottlenecks like sluggish or blocked supply chains. In such ways, you can streamline your operations and cut down your carbon emissions.

Social 

PI also helps identify instances where staff and/or customers are not treated fairly, equally or inclusively. It can locate potential conflicts of interest and suggest solutions that will help you address these issues promptly. This is a step towards the long-term development of trust between all members of a company and its customers. It will also improve your organisation’s business and social reputation, thus having a positive impact on its ESG performance.

Governance 

Transparency in regulatory reporting is founded on increasing data quality and data governance, automating processes and streamlining ESG data. ESG compliance includes following data privacy protection regulations, tracking the transparency of supply chains and enforcing inclusive hiring practices. PI tools help identify aspects of these areas where greater automation is an advantage to ESG reporting. These are primarily those where full transparency demands real-time frequent monitoring, as well as audit trails and demonstrable compliance. 

Increased Efficiency

Automating repetitive, time-consuming tasks with RPA liberates employees to concentrate on higher-level tasks. This also reduces these tasks’ carbon footprint.

Cost savings derived from increased efficiency might include labour costs on those tasks now automated, and less time spent on customer-related inquiries and service.

RPA performs automated tasks with greater accuracy, improving data quality and reducing errors. It also works 24/7, collecting data constantly in real-time and can be scaled up or down in response to changing market conditions. Since RPA can work in almost any system with a user interface, it has access to many more data points.

Reducing Your Carbon Footprint With RPA

Digital workers are generally located on servers that don’t move from place to place. They create no carbon footprint – unlike human workers, who travel to and from the workplace. Neither do they produce waste from items consumed during working hours, such as disposable cups and food packaging.

Automation with RPA digital workers can help to reduce your carbon footprint, as they’re more energy-efficient than human beings. They run on electricity rather than food and drink, so usually require less energy to carry out the same tasks. 

Modern computing equipment is also much more energy-efficient, especially when using cloud services, which further reduces their carbon footprint. Digital workers can operate continuously, 24/7, so they’re more efficient over longer periods. They’re also consistently far more accurate. They complete more work in the same amount of time as humans, with fewer errors or do-overs.

These factors all contribute to digital workers creating a lower carbon footprint than human workers.

Factory Automation And ESG Compliance 

The combination of RPA and PI can significantly improve your ESG performance. Once production processes are automated and optimised, you’ll start seeing reductions in waste and environmental threats. Your carbon footprint will be smaller, while your energy efficiency will improve. Your social impact will be enhanced by freeing human employees for higher-level work, thus encouraging a more engaged and motivated workforce. 

All these factors can be collected as data and assessed by off-the-shelf software packages that make ESG compliance much easier.