Regulatory bodies and shareholders alike are ramping up the pressure on financial institutions. This ramp up is to prioritize environmental, social and governance (ESG) initiatives. With the growing importance of corporate social responsibility, ESG program can’t purely be a public relations exercise true commitment and compliance is now crucial to success.
The adoption of such initiatives is growing, with 80 per cent of banks having already made commitments. Several commercial banks, have recently offered Britvic a sustainability-linked credit facility of up to £400 million. Which is dependent on whether the company can meet various ESG targets. But these programs aren’t often simple. To ensure ESG initiatives are successful, a huge amount of data has to be collected, processed, and reported on. A bank that wanted to track its energy consumption would require intensive data collection and analysis across hundreds of sub-entities and locations.
Increasingly, the banking and finance sector is finding software robots for this purpose and that are becoming an integral part of ESG success. The technology’s ability to comb through huge volumes of data, quickly and accurately, makes it the perfect tool to support ESG initiatives. Software robots can sort through this information and report back to human colleagues. In other institutions, software robots are pulling together reports to help shape investment strategies in line with ESG policies. Robots can pull information from prospectuses, quarterly and annual reports, third party analysis and media reports, and consolidate the required information into the necessary format.
The application also stretches beyond reporting and the technology can also be used to enact change. A Turkish bank is using this technology to process requests to postpone loan repayments for customers impacted by COVID in line with its social responsibility initiatives. In order for ESG programs to be successful, auditing is crucial. Once again automation can help. Auditing teams already have a lot without ESG being thrown into the mix. And also, the software robots can assist in much of the sampling, monitoring, and assessment activities that drive a successful ESG auditing program.
The application of automation in ESG initiatives is vast and often varies from business to business depending on their specific goals. Human colleagues can’t pick up all the works alone and ideally should remain focused on those tasks that require decision making and strategy. Software robots are the perfect candidates to assist with the data-heavy processes that come with ESG initiatives. Those organizations that deploy automation now to address their ESG needs will be ready to respond to new regulations and standards as they emerge.