There are two main challenges that the market faces: 1. ESG data, 2. ESG regulation
ESG data is very challenging to deal with as it is inconsistent, unstandardised and has a lot of gaps. Environmental reporting is getting a lot better but there is still a long way to go, even if you have the latest environmental data it can be 1 or 2 years out of date. Social data is even more challenging to gather than Environmental data. This is largely because a lot of Social data points are inherently more subjective than Environmental or Governance data points. Many Social data points do not tend to be reported by companies like employee satisfaction or community impact.
Investors need to keep up with ever-changing sustainability regulations and frameworks such as the SFDR which requires them to report on over 50 metrics at the portfolio level.
Technology can help us overcome some of these challenges, for example, we can use technology to collect as much data as possible from a variety of different sources such as NGO data sources and not just rely on company disclosure or lack thereof. We can use NLP models to process the news at scale looking at high-quality sources and get an up-to-date view of a company’s ESG performance.
Our platform acts as an automated ESG analyst team which can support investors through the whole ESG investment lifecycle and save them a significant amount of time and money. We have mappings to all the major sustainability frameworks and using our ESG Analytics platform, investors can upload a portfolio and assess the performance of their portfolios with respect to these frameworks in minutes.
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