Episode 5: How GenAI is Revolutionising Business Value

Full transcript

Ivy Kuo:Hello, I'm Ivy Kuo, PwC Asia Pacific Sustainability Leader, and you're listening to PwC's ESG podcast, Defining Asia Pacific's Future, the podcast for bite-sized updates on the latest sustainability trends, from climate change to social and labour rights due diligence. We bring together ESG practitioners to discuss and solve today and tomorrow's sustainability challenges, reflecting PwC strategy of building trust and delivering sustained outcomes. Following the success of earlier episodes, I'm pleased to announce that we will feature various PwC sustainability specialists in this podcast series. 

The development of technology in the past decade puts pressure for companies to transform their business models to survive and create more value. At the heart of this transformation lies generative AI, also known as GenAI, a groundbreaking catalyst that challenges traditional norms and offers new opportunities for sustainable development. Acknowledging the opportunities and the changes GenAI is set to bring, it is important for us to learn more about the topic and its implication for sustainability. Joining me today is Rob Pedler, Asia Pacific Sustainability Digital specialist, to discuss the intersection between GenAI and sustainability, exploring new tech-based sustainable practices.

Welcome, Rob. Thank you for joining me. First question for you, for those of us who are not experts in technology and digital advancement, can you please start by explaining what exactly is GenAI?

Rob Pedler:Thanks, Ivy. GenAI is a type of artificial intelligence that can generate new content ideas or data patterns based on its training. Whereas traditional AI is very good at analysing and finding patterns in structured data, GenAI's strength is processing, analysing, and creating unstructured data such as text, images, video, and code. Sustainability processes typically rely on large-scale consumption and generation of unstructured data, which is why GenAI is so attractive to augment and transform sustainability processes and models. 

Let me give you a couple of examples for business, such as optimising resources. GenAI can help businesses use their resources more efficiently by replacing manual processes to collect, analyse, and ingest data, accelerating those processes, improving accuracy and quality, reducing time, waste, and therefore saving costs. A second area is data analysis. With its ability to analyse large volumes of data, GenAI can provide accurate insights for sustainability decisions, helping companies to align their strategies with sustainable goals and practices. And finally, innovation and transformation, very important. GenAI's unique capabilities drive innovation by redesigning processes including sustainability, and putting GenAI at the centre of sustainability practices, wrapped of course with appropriate governance and controls. In essence, GenAI acts as a strategic catalyst for embedding sustainable practices at the core of business operations, promising a future where innovation aligns with their environmental responsibilities. 

Ivy Kuo:Thank you, Rob. That was a good introduction. Now comes the interesting question for you. How can GenAI drive sustainable practices within organisations and their corporate functions?

Rob Pedler:Ivy, GenAI can assist in driving sustainable practices across many functions within an organisation. Some opportunities include:

Using its data insights & scenario analysis power to quickly analyse large amounts of data to identify opportunities to improve performance and reduce environmental impacts. For example, analysis of energy usage data to identify where consumption may be reduced or using supply chain data to model decarbonisation opportunities for reduction of waste.

In automation, GenAI can drive process improvement and automation to also reduce waste and improve efficiencies. GenAI can monitor a building management system to adjust energy consumption, lighting and air conditioning in real time based on a range of factors such as energy prices, time of day and staffing levels.

GenAI can assist with employee engagement and productivity by providing them with information, insights and incentives on activities that may assist with their productivity or reduce their impact on the environment. As with automation, GenAI can take on low value, repetitive tasks such as data collection and data ingestion, allowing employees to focus on higher value adding activities.

At PwC, we are using GenAI to help our clients prepare for CSRD (Corporate Sustainability Reporting Directive) reporting requirements. We built a diagnostic accelerator that uses GenAI to ingest, analyse, and populate the data model and help calculate their readiness, their gaps, and a pathway towards compliance. GenAI accelerates the data capture process and reduces the manual processing required. We are, of course, looking at other applications of GenAI across the end-to-end sustainability reporting processes.

Ivy Kuo:That's fantastic. So how would you suggest for a business to utilise GenAI into sustainability initiatives for their companies? 

Rob Pedler:So given GenAI's strength is processing and generating unstructured content, which aligns closely to sustainability processes, Ivy, there are a number of areas that we believe GenAI can provide opportunities for transformation. The first opportunity is improving the speed and quality of data collection from various sources, in various forms, and creating new data based on those patterns and relationships. I mentioned earlier the CSRD diagnostic example. The second area that we see is assisting in preparation and generation of qualitative content for sustainability reports. About half of the KPIs (Key Performance Indicators) in CSRD are quantitative, the other half are qualitative, and tools like GenAI can help materially accelerate the preparation of those reports. 

GenAI can provide regulatory and legal intelligence for organisations to help them collect and assess changes across their countries that may impact their reporting disclosures and legal obligations. Another area, given the massive amount of data involved, is to support supplier collaboration across the supply chain, to help manage and monitor Scope 3 emissions data. These are some examples, there are more. And PwC has a mature design thinking methodology to assist our clients through innovation phases and to help implement transformative technologies like GenAI. 

Ivy Kuo:Thank you, Rob. The opportunity seems fairly straightforward, but less than 50% of Asia Pacific CEOs have yet to integrate GenAI, despite knowing its impact. Do you think there is an issue or concerns regarding risk or trust for GenAI adoption, and if that's the case, do you have any suggestions for how business can integrate trust into GenAI? 

Rob Pedler:Yeah, look, the survey showed the take-up of GenAI has been cautious, but it also indicated a general optimism and positive sentiment towards adoption of this platform. Like many other previous technologies, GenAI has both its challenges and its opportunities. My advice is to find the use case in the organisation to pilot small and get started to build confidence and competence, and then grow out from there. We talked about the opportunities for embedding GenAI into sustainability processes, and there are of course issues and risks that need to be managed and mitigated along the way. These include topics such as the importance of assurance of the outputs from GenAI for trusted inputs to other processes and disclosures. This is absolutely fundamental. There's strong governance needed around the deployment and ethical use of GenAI across the business, including training of users in their responsibilities when using GenAI in the business. 

Another area is the paramount confidentiality protection that is considered around the use of company and client data in AI models. Another point is cybersecurity. It is also imperative that this fundamental data is protected. The final area, it's interesting, is accountability for the energy consumption impacts and carbon footprint associated with GenAI usage. GenAI is a very large consumer of computing power, and therefore energy. That needs to be accounted for in your sustainability goals. These issues and risks, of course, can be managed, so the opportunities are also to be realised. Just stepping back a moment and looking at the mega trend perspective for GenAI, according to Goldman Sachs, GenAI could drive a 7% increase in global GDP (Gross Domestic Product), which translates to around US$7 trillion, and uplift productivity by around 1.5 percentage points over the next 10 years1. I mean, this is a massive economic opportunity. Where world economies are seeing productivity growth stalling, GenAI has the opportunity to kickstart growth again. 

Ivy Kuo:Thank you, Rob. You've shared a lot of interesting insights with us. Now, to wrap up with our last question, can you give the audience your top three things for us to remember today and to help business leaders start turning theory into action?

Rob Pedler:Yeah, so my top three are these. Firstly, GenAI provides a transformative opportunity for business that really comes around maybe once every 15 to 20 years. Let's make sure we seize the opportunity based on the risk appetite of the organisation. Suggest a "crawl, walk, run" approach where organisations start small and focused. They increment from there, and then transform afterwards based on their experience, confidence, and success. 

Secondly, it's really important to assess GenAI investments with the same rigour as other digital and transformation investments by considering the people, process, technology, assurance, and governance dimensions as a part of those business cases. 

Finally, given GenAI touches and is touched by many parts of the business, its ecosystem, communities, and regulators, look out for other future podcasts with GenAI, and we will unpack these topics. 

Ivy Kuo:Thank you very much for joining me for this special episode on generative AI and sustainability. The discussion has shown us that GenAI poses great opportunities for sustainability and businesses in Asia Pacific. However, we must remember that it remains an ever-changing domain. Hence, implementing GenAI or responsible AI is integral to building trust.  

Remember, what comes with challenges comes with greater opportunities. Now is the time. There are significant opportunities for businesses to reassess their priorities, transform their business models, and create sustained value for the future. 

_{¹ Goldman Sachs, Generative AI could raise global GDP by 7%, 2023}

© 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.