Business Leaders & Data Experts Tackle ESG Data Challenges – Insights on ESG Data Strategy from Customer Discussion
In sustainable investment and global business decision-making, the importance of ESG (Environmental, Social, and Governance) cannot be overstated. It has emerged as a central element guiding the actions of companies worldwide. To explore the depths of this topic, an insightful roundtable unfolded in the freezing city of Oslo, Norway. The event brought together business leaders and data experts to discuss the challenges, progress, and solutions for accurate ESG reporting. One of the objectives was to discuss the utilization of ESG data and related strategies.
Inspiration
Our guest speakers for the night came from Snowflake with special focus on sustainability, data strategy, and business transformation. Anoop Sharma, Data & Analytics, LTIMindtree Nordics, and I from LTIMindtree hosted the roundtable.
Here are some of my thoughts and findings from the evening.
Framework for the finance sector
A delegate highlighted that financial institutions bear indirect responsibility for their carbon emissions associated with investments in third-party companies and loans for private residences, such as houses and apartments. These emissions, known as financed emissions, can significantly contribute to annual greenhouse gas emissions. The process of collecting and calculating the total carbon footprint is time-consuming.
Finance Denmark was mentioned for their development of a carbon emissions model and framework for the sector. This model offers credit institutions, investment funds, asset managers, and pension firms a strong basis to calculate their carbon footprint associated with their investments and loans. A data expert highlighted that this represents a significant step towards calculating the carbon footprint with these pre-defined business rules.
Fueling collaborative ESG data
It is clear that handling ESG data via emails and estimates will not make it; a modern ESG platform is needed to gather and share accurate ESG results with the relevant stakeholders within the organization. One delegate noted that while public ESG data is already available to the bank, it still requires curation before being stored in an ESG platform. Ideally, this platform should have the ability to share data with external companies via a cloud service, which is beneficial as firms can leverage each other’s work on ESG data. While there was an agreement on the need for modern technology, some individuals expressed concerns about the complexity involved in accurately calculating the carbon footprint.
Life lessons from the art of cake baking
As one delegate expressed during the conversation, baking a cake is a lengthy process that requires different ingredients, each playing a crucial role in the final result. Each ingredient comes with a carbon emission number, often in different forms and shapes, and needs to be recalculated based on the amount used. Another delegate from the shipping industry reinforced this point. The total carbon emissions for the transport of goods must be delivered per package. The shipping industry often uses different fuel types as they refuel the ship during transportation, and the figures are usually presented in gallons or liters, further complicating the calculation.
Harmonizing emission data in the pipeline is a team sport
The technical members of the audience responded, “We utilize Python and SQL in our pipeline to harmonize these diverse formats and figures to reach a single carbon emission value. We can perform these calculations if we have accurate data integration and pipelines. Once the business defines the formula, like in the Finance Institution example above, it is all about programming the pipeline.” It was pointed out that this reinforced the need for collaboration between business and data experts to create a robust ecosystem for ESG data collection, calculation rules, and reporting services.
From estimates to metrics
Among the audience, there was a concern that companies too often estimate or make educated guesses about their ESG metrics when exact data is unavailable. This can be due to a lack of transparency or insufficient reporting. The suggestion was that estimation be replaced with correct ESG calculation, which uses specific business rules and measurable data to determine ESG metrics. However, their accuracy depends on data availability, reliability, and pre-defined business rules.
Pioneering the path to progress!
A delegate posed a challenge of where to start and what to prioritize, which can be a difficult task. The speaker from Snowflake suggested hackathons to find the right ESG use case. It’s about finding the use case with the maximum impact. Recently, they conducted a hackathon for the retail business and discovered that the return of goods significantly impacted the total carbon emission. This led to business rules for calculating carbon emissions for the return process but also initiated an internal business project to reduce the return of goods. As pointed out by another delegate, ESG projects can also be seen as a cost-saving activity.
Sharing data on a global scale
As the evening progressed, it became clear that there was a need for publicly shared ESG data within the community. The marketplace concept was proposed for discovering, accessing, and offering third-party data services through cloud. This enables businesses to distribute curated data sets and access public ESG data from multiple companies simultaneously.
The speaker from Snowflake clarified that the Snowflake Data Cloud Service acts as a marketplace to assist in finding and procuring new third-party ESG datasets. These datasets are then integrated into an already established database of in-house ESG metrics and compared with proprietary ESG scores. A demonstration of how ESG data is integrated into a financial services workflow is available here.
The ESG poem
During the closing, one delegate shared a poem for the audience and Snowflake:
Don’t choose to have happiness over snow.
You will have less joy in life.
But you will have the same part of snow.
Why, what, and data strategy of the event
In conclusion, ESG has become a pivotal factor influencing organizations globally. The roundtable event highlighted the need for a modern ESG platform to gather and share accurate results with relevant stakeholders. The discussion emphasized the requirement for collaboration between business and data experts to create a robust ecosystem for ESG data collection, calculation rules, and reporting services. As we navigate the complexities of ESG data, developing an ESG data strategy and leveraging modern technology is essential to ensure the accuracy of carbon footprint measurements.
It’s crucial to highlight the importance of a strong ecosystem of partners in helping an organization overcome unexpected roadblocks. This can best be achieved by drawing on insights from lessons learned from use cases, inspiring workshops, or even hackathons as mention during the discussion – no business can tackle such challenges single-handedly.
1.1.1 Explore more here:
LTIMindtree: Enterprise ESG Strategy with Snowflake
LTIMindtree’s Manufacturing NxT, built on Snowflake Manufacturing Cloud
LTIMindtree’s ESG & Sustainability Tech Consulting
LTIMindtree’s ESG Consulting Services and Digital Offerings video
Snowflake: Telecoms Reduce Carbon Emissions with Generative AI
Snowflake: Snowflake Enables Cargill’s Goal to Achieve Zero Carbon Shipping
Snowflake: Scania Uses Data Mesh and Snowflake’s Data Cloud to Drive Transport Sustainability
Snowflake: Data Sharing Is Caring: Driving Sustainability with Data
Snowflake: Demo of how ESG Data is incorporated into a Financial Services workflow
Snowflake: How to build an efficient enterprise ESG data strategy in banking with machine learning
Snowflake: Natwest transforms its ESG analytics and data culture
Snowflake demo: incorporating ESG into portfolio construction
More from Tom Christensen
In the evolving landscape of technology, the rise of quantum computing stands out as a frontier…
Discussions about Gen AI apps often turn to values such as efficiency, growth, and streamlining…
The rise of artificial intelligence (AI) has sparked concern among workers and future professionals…
In the first week of June 2024, San Francisco experienced an extraordinary event of snowfall.…
Latest Blogs
In today's digital era, ransomware attacks and other cyber threats are more prevalent than…
In the evolving landscape of technology, the rise of quantum computing stands out as a frontier…
In contemporary corporate landscapes, the pursuit of human resources (HR) transformation remains…
In the dynamic realm of big data, advanced analytics, and artificial intelligence, the strategic…