ESG Data for Financial Services in an Operational Environment

AFME and Protiviti published their report “ESG Data for Financial Services in an Operational Environment“, delving into the operational implications of ESG regulatory reporting requirements in the financial services sector.
The report emphasizes that as sustainability and responsible investing gain prominence, there is a growing demand for accurate, comprehensive, quantitative, and reliable ESG data. It highlights that ESG reporting is no longer a qualitative, subjective exercise. Firms now must provide data that meets the evolving requirements of ESG regulations, satisfying the needs of regulators, third-party partners, and other stakeholders.
The report underscores the importance of managing ESG data throughout its lifecycle, which includes various stages such as data collection, storage, processing, integration, usage, archival, and deletion. ESG standards and regulations have a significant impact on how data flows through these stages, affecting the overall data operations. The paper also acknowledges the challenges faced by financial institutions in managing ESG data, particularly due to the diverse data categories and formats required for ESG reporting, as well as inconsistencies in data sources and calculation methods.
Furthermore, the report emphasizes the role of emerging technologies in the ESG and data operations space. It discusses the opportunities presented by new technologies, especially AI and ML , and their impact on ESG and data operations. The integration of cloud computing and AI/ML is expected to be a game-changer, providing scalability, flexibility, and cost-effectiveness for handling the vast amount of data required for ESG analysis.