ESG Data Challenge

ESG data has become a critical component in the evaluation of a company’s performance, not only ranking alongside financial data in importance, but frequently being used as a predictor of future financial achievement.

Thomas Russell, Sept 21, 2020

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ESG data has become a critical component in the evaluation of a company’s performance, not only ranking alongside financial data in importance, but frequently being used as a predictor of future financial achievement.

Within our client base, we frequently see the ESG business lead juggling the increasing demands for accurate and timely ESG data from.

  • The Board for good governance and to aid informed decision making.
  • Investors and potential investors, motivated by the proven links between a company’s positive approach to ESG and its financial performance.
  • Key stakeholders, including customers, shareholders, employees and prospective employees who want realtime ESG data for values-based decision making.
  • Lenders, increasingly associating loans with favourable interest rates with ESG performance.
  • Regulators, complaisant for now but quickly moving towards regulatory targets, reporting requirements and possible fines for non-compliance. Jurisdictional variations will also no doubt apply.
  • Ratings agencies, such as Moody's and S&P Global who rate listed businesses on ESG performance and risk profile.

However, as these ESG data requirements become more complex, we see our clients’ administrative burden growing. And, as interest in the ‘S’ and the ‘G’ increases, their costs and risk exposure are increasing too.

The process of gathering and checking the volume and diversity of data from across a business, blending it with external data, formatting it for each user’s requirements and ensuring that the business can defend each individual dataset if challenged weighs heavily on the nominated ESG lead.

For a large corporate with the resources and the budget to build infrastructure around the data gathering process, the situation is fairly stable right now. However, we predict that in in less than a year’s time the granularity of the data produced by global companies will not satisfy the active investor or values-led consumer.

The greatest challenge is for the mid-cap or SME business that is; trying to measure and present its ESG performance to access new sources of investment, to satisfy lending criteria or to align its approach to its customers’ social conscience.

Some try to solve the problem by focusing on the outputs - reports, benchmarks and metrics. We suggest that a more radical rethink is required, directing the focus further upstream, to redefine the data flow required to support delivery.

Shifting focus in this way highlights two key bottlenecks that impact ESG data management.

  • keyboard-arrow-right knowing what data to gather and from where
  • keyboard-arrow-right having the capability to gather it efficiently

It sounds simple, but in retracing our steps to the origins of ESG data flow, we were able to design our award-winning Gather 360 data tool to address the key challenges at each stage of the data collection process.

Gather 360 is based on three key principles.

  • Change how ESG data is requested and you change the quality of ESG data received.
  • Enable ESG data suppliers, internal and external, to test and correct the data before its provided and you slash the time and cost of checking and cross-referencing.
  • Wrap these activities in easy to use smart, secure technology that orchestrates and governs the key activities and you enable the development of a high-quality data layer with data provenance embedded.

Today, clients, across multiple sectors use Gather 360 for

  • Board reporting to easily source and assimilate relevant data for monthly Board meetings and tailor reports for business-critical projects.
  • Investor and stakeholder engagement to easily source and format relevant data for each stakeholder group.
  • Monetising their data packaging and selling ESG data sets.
  • Lender reporting to access new sources of lending with lower interest rate ESG-aligned loans
  • Regulatory submissions to get ahead of competitors by proactively preparing regulatory infrastructure for future compliance and reporting requirements.
  • Ratings Agency submissions to dramatically improve ESG ratings and risk profiles by providing a detailed and accurate view of ESG performance.
  • ESG data onboarding to power existing ESG tools and technologies with statistically accurate data.

Gather 360 has been designed for the business user, not the IT team. It's an intuitive, secure, cloud-based tool that integrates easily with existing data systems and legacy infrastructures.

A free, fully supported trial account is available to help clients to understand the benefits and opportunities that gather 360 offers. Click here to set up your trial account.

For more information on ESG data, join our Gather 360 e-seminar on ‘The ESG Data Quest’ on Thursday 8th October 2020, 14.00 Dublin.

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