At heart, ESG reporting is a data management issue. Each stakeholder brings their own set of challenges to the table. For corporates, the key issue is how best to manage disintermediated data across their business and supply chains. Regulators are looking for ways to ensure corporates are compliant with their ESG data. Investors are thinking about how they can bring ESG data together for analysis. And all stakeholders, including customers, are demanding new levels of data visibility.
These interlinked challenges lie under what is a highly complex value chain and data flow:
- Identify data requirements from regulations or reporting demands.
- Consolidate data from disparate source systems into a structured, accessible and manageable location.
- Synthesise/cleanse the data.
- Analyse and visualise the data for value.
What makes this data flow so difficult to achieve is that ESG data is often siloed across business functions. Integrating and analysing these data sets using only corporate systems is resource intensive and demands access to highly skilled technicians and data scientists – skills that are in great demand and therefore hard to come by. Firms need access to timely, high quality and rich data – all too often they are hampered by inflexible systems and poor visibility into their data estate.