Carlyle exec: Automation is a looming ESG issue

The wave of automation that is just starting to hit private equity portfolios needs to be thought-through from an ESG standpoint, delegates at the Operating Partners Forum: Europe were warned on Tuesday.

The proliferation of robotic process automation (RPA) is now an ESG consideration for private equity firms, according to Georgette Kiser, an operating executive with The Carlyle Group and a former chief information officer at the private equity giant.

“Where do we find the balance so we don’t create a society that ends up collecting welfare cheques?” Kiser asked in the keynote address at Private Equity International‘s Operating Partners Forum: Europe 2019. “As you are driving for efficiency, how are you helping the people coming out the other end? It is a question of ESG.”

The impact that automation is having – and will have – on portfolio companies had been laid bare in a keynote address by Anubav Saxena. The executive vice-president of Automation Anywhere, one of the leading providers of RPA technology, said that by 2021, 150 million jobs will have been replaced by robots.

Kiser pointed to the positive work carried out by Google in establishing free resources to help people develop their digital skills. She also noted that government may have a role to play.

Also on the agenda was the growing importance of the chief information officer as a business leader in any company.

“The CIO has evolved into a business role,” Kiser said. “They should be at the table with the CEO to understand exactly what the technology needs of the organisation are.”

Kiser said that Carlyle, as a business owner, tends to look at heads of technology at investee companies who understand “break-fix” and think “how can we develop these heads of technology into chief information officers? … Between data and technology, if you don’t have the right mindset, you won’t be successful.”

“You’re going to see a lot of CIOs moving into CEO roles, because that is what is required,” said Kiser, who qualified the statement by saying it was a “Georgette opinion” rather than a Carlyle view.

The Operating Partners Forum: Europe 2019 continues in London today and tomorrow.