ESG vs. Robots? It's Simply a Battle That Doesn't Exist

Written by: Richard Lightbound , CEO of ROBO Global EMEA

For the past week, I’ve been traveling around Italy on a fascinating, whirlwind tour of some of the best and brightest companies and investors in the region. It’s an excursion with a purpose: as we approach the end of Q3, it’s time to rebalance the ROBO Global Index, which means potentially adding some rising stars to the mix that pass through our research and quality filters. It’s been amazing to ride on the coattails of Professor Wyatt Newman, one of ROBO Global’s key advisors (who we fondly refer to as “the PhDs”) as he prepared for his TEDx Luguano talk on Professions of the Future . As you can imagine, traveling with Wyatt is a continuous education when it comes to the nuances and complexities of robotics, automation, and artificial intelligence (AI). I’m stunned over and over again, not only by what is already possible using these technologies, but also by what the future will look like on the very near horizon.

When Wyatt talks to the investment community about how robotics and AI will change the entire landscape of our lives in the next decade (no, this is no longer futuristic dreaming, but our inevitable reality), the topic of ESG seems to rise to the top of the discussion more than ever. I’m not surprised. While ESG investing (short for Environmental, Social, and Governance) is rising in popularity in the US, it is still considered a “nice to have” component in a portfolio. In Europe, on the other hand, ESG is nearly always part of the investment discussion; some individual and institutional investors won’t even consider non-ESG investments.

If that sounds foolish from a returns perspective, you haven’t seen the flurry of media coverage on the topic, including this article in last week’s Financial Times. While some attribute the recent high performance of ESG companies to a “cyclical blip,” it’s clear that not only are “green stocks” outperforming at the moment, but also that the focus on ESG among younger investors is making the development of regulatory guidelines for ESG (which currently don’t exist) non-negotiable. At ROBO Global, we have already established our own ESG policy and screening process.

Like many of my fellow Europeans, I place a high value on ESG. I believe it’s vital for investors to “put our money where our mouths are” to influence industry moving forward. Perhaps this is why the perceived battle between ESG and robots is a bit infuriating to me. Just talk to Wyatt for an hour and you too would feel frustrated by the mythical war of ESG vs. Robots.

Related: Investor Spotlight: Agricultural Robots Are Set to Solve the Global Food Crisis

Clearly, part of our fascination with robots in general, and perhaps AI specifically, is that it threatens our sensibilities of “man vs. machine.” It’s a popular topic in literature, movies, and even the news media. It’s easy to pit robots against humans, but is the threat real? Or could it be that robotics, automation and artificial intelligence (or RAAI) supports humans—and our desire for a world that is driven by ESG ideals?

Here’s some food for thought:

Robots support and strengthen the human workforce.

For decades, we’ve relied on robots to replace humans for deep-space exploration. Today, robots continue to keep humans safe by performing the dangerous work of inspecting deep-sea pipelines. “Petrobots” are programmed to do jobs that are too risky or impossible for humans to achieve. Autonomous trucks are poised to protect the lives of the nearly 800 drivers killed each year in one of the deadliest jobs in the US . And while collaborative robots are touted for their ability to drive efficiencies in factories, the biggest benefit they provide is a reduction in workplace injuries—to humans. (Read more in Robots Can Help Reduce 35% of Work Days Lost to Injury .)

Robots improve medical outcomes.

First used in the healthcare in 1985, robots have had a major impact on the industry, transforming procedures in nearly every area of medicine, including neurosurgery, laparoscopy, orthopedic surgery, emergency response, and a long and growing list of other disciplines. Robot-assisted surgeries enable surgeons to work longer hours and potentially extend the length of their careers. Robotic prosthetics like this will be life changing for thousands of current and future amputees.

Robots are good for the environment—and the world.

Robots reduce the cost of recycling by “seeing” non-recyclable materials on a conveyer belt and separating and sorting materials. “Muscle robots” are being used to clean up the reactors at Fukushima Daiichi nuclear plant . Underwater robots are in the works to help salmon farmers in Singapore complete the otherwise back-breaking tasks of ensuring their nets don’t get clogged so fish can grow in healthy conditions. Community robots are expected to increase the quality of life for people in developing countries, supporting more sustainable, healthy, and safe communities by testing water quality, providing accessibility to healthcare, performing dangerous agricultural work, and more.

The list goes on and on. While it is true that robotics and AI are used in what some consider to be ESG-averse industries such as oil and gas and certain agricultures, it’s clear that RAAI as a whole is doing much more good than harm from an ESG perspective. Robots will replace workers in certain areas of industry, but looking at the broader picture, I can only wonder if there’s something even more important for our human workforce to achieve to make our world a better, more healthy place to live—all with the support and assistance of RAAI. The first step? Let’s put the “war” between ESG and robots to rest once and for all.

The ROBO Global® Robotics and Automation Index and the ROBO Global® Robotics and Automation UCITS Index (the “Indices”) are the property of ROBO who have contracted with Solactive AG to calculate and maintain the Indices. Past performance of an index is not a guarantee of future results. It is not intended that anything stated above should be construed as an offer or invitation to buy or sell any investment in any Investment Fund or other investment vehicle referred to in this website, or for potential investors to engage in any investment activity.