On 16th and 17th November, DTSQUARED were proud to sponsor FIMA – Europe’s largest data conference for Banks and Asset Managers – where leading data professionals from financial services gathered to network, collaborate, and share ideas across a range of current topics.
One of the key themes throughout the event was Environmental, Social and Governance (ESG) data, which is now increasingly being recognised as a strategic asset for organisations in every industry.
To offer an insight into the content shared over the two days, here we revisit one of the standout panel discussions on ESG data, as well as the results of an ESG survey that DTSQUARED carried out with the delegates.
On the first day of the conference, DTSQUARED participated in a panel discussion on How Can You Source Better Alternative and ESG Data to Support Your Business’ Sustainability Goals and Gain a Competitive Edge? with speakers including the Head of ESG Data at HSBC, the Head of Omni Digital Services at BNY Mellon, as well as a Senior Project Manager from ::projective specialising in ESG issues.
The panel first addressed the reasons why ESG data is such an important consideration for organisations today. Firstly, the regulatory landscape is constantly evolving and, as disclosures become mandatory, ESG data will allow organisations to more easily and accurately satisfy regulatory requirements and avoid potential fines. Secondly, sustainability has become a key deciding factor in investment in recent years, and ESG data therefore allows companies to prove their sustainable activity to investors, in turn increasing their chance of growth and financial gain. Finally, consumers of today are increasingly seeking to engage with sustainable organisations, making a strong ESG profile – and hence strong ESG data – a key component of a brand’s image.
The speakers then moved on to discuss the challenges surrounding sourcing ESG data. As companies work through their ESG data reporting lifecycle – going from understanding their reporting requirements, modelling their data, sourcing external data and overlaying internal data to produce ratings – they can face a number of challenges. These include a lack of available data, hence forcing usage of multiple sources and estimates, as well as non-standardised data in need of harmonisation. Data issues can lead to inaccurate ESG reporting and low ESG scores, which can in turn damage reputation and result in financial loss.
Finally, the panel went on to identify potential solutions to these challenges and explain how ESG data can help organisations gain a competitive edge. The speakers covered how companies with strong ESG performance have demonstrated higher returns on their investments, lower risks, and better resilience during a crisis. It was therefore concluded that as ESG reporting becomes more popular, and eventually a norm for most companies through growing pressure from regulatory initiatives, ESG data will become a vital part of every business in order to maintain their competitive advantage and contribute to the global sustainability movement.
With FIMA attracting delegates from many of the largest financial services organisations across Europe, DTSQUARED took the opportunity to carry out a survey on The Future of ESG as a way of gaining valuable insight into the attitudes and beliefs of data leaders.
The results were intriguing, with 45% of respondents saying that future ESG regulatory requirements are a top priority for their organisation, yet over a third admitting that they do not have a good understanding of the disclosures and regulations that they are required to comply with over the next two years.
When it comes to solutions for supporting ESG performance, 68% of those surveyed do not currently have a governance structure to support ESG initiatives in place. Similarly, 74% have never had an ESG data maturity evaluation, however the majority of this group said that they are either planning or interested in one.
As we have established, organisations can face numerous challenges when working through their ESG reporting lifecycle. In our survey, respondents reported that the biggest obstacles to accurate ESG reporting were problems locating internal data, gaps in internal and external data, onboarding new datasets and data quality issues.
Finally, we asked respondents what they saw as the best approach to developing company-wide adoption of ESG considerations. The results showed that training and education rollout was the most favoured option, with stakeholder support and promotion in second place. However, nearly a third of those surveyed said that all of the approaches listed would be equally as effective (see chart below.)
It is clear that ESG is, and will continue to be, a top priority for organisations in FY22 and beyond, but our survey insight demonstrates that the majority of organisations are still unsure on how to best implement the most impactful and efficient ESG strategies.
This year’s FIMA conference gave everyone the invaluable, long-awaited opportunity to interact face-to-face with other industry professionals to discover what hopes, expectations and challenges they will be taking with them into the coming year. Despite some uncertainty around strategies for the future, the event undoubtedly reminded all who attended of the power of people coming together.
We are here to help our clients on their ESG journeys by addressing their challenges and leveraging the power of data. To find out how we can help you achieve your ESG objectives, speak to one of our experts today. For more information on this subject, you can read our recent ESG whitepaper or sign up to our upcoming ESG roundtable , where a panel of experts will be discussing everything you need to know to prepare your organisation for the future of ESG reporting.