S&P Global Market Intelligence has won the award for Best ESG Solution for Unstructured Data at the A-Team Group ESG Insights Awards 2024. The judges considered the company’s ESG Data Management as a Service as the most innovative offering in a very strong field of entrants.
These awards recognise both established solution vendors and innovative newcomers providing leading ESG solutions, services and consultancy to capital markets participants.
Tom Archer, Director, Sustainability Software Solutions at S&P Global Market Intelligence spoke to ESG Insight about the challenges that his company’s data management-as-a-service solves for financial institutions as they integrate ESG into their workflows and operations.
A-Team: What challenges, in general, does unstructured data present data managers?
Tom: Given the volume of ESG data that is needed today to support front- to back-office functions, firms rely heavily on multiple third-party providers that deliver disparate data in numerous formats. There are also many more differences across providers than for other types of data (for instance, credit ratings) because of the range of methodologies and opinions that come into play. The problem of unstructured ESG data is due to the number of ESG providers there are in the market and the different ways the data is distributed to clients. There is no standard delivery channel, which causes problems when onboarding datasets, including significant costs and increased time to market.
A-Team: Does unstructured ESG data offer any specific challenges?
Tom: The lack of a consistent format means you can’t easily use the data effectively within the institution. Some of the other challenges are:
- Data integration
- Data quality assurance
- Data standardisation
- Master data management (MDM)
- Data governance and compliance
- Data analysis and visualisation
- Data storage and scalability
- Vendor management.
A-Team: What is required to address these challenges?
Tom: Addressing these challenges requires a holistic approach that combines technology, data management practices, and stakeholder collaboration. Data managers must continuously adapt to evolving data sources, standards, and regulatory requirements to effectively manage unstructured ESG data and derive actionable insights for decision-making regarding sustainability.
A-Team: How does S&P Global’s award-winning solution solve for these challenges?
Tom: Since the merger of S&P Global and IHS Markit, we have focused on bringing together our technology and datasets to create end-to-end ESG solutions for our clients. By bringing our Sustainable1 data into our ESG Data Management as a Service, we have been able to create a product that empowers firms to accelerate their sustainability strategies by outsourcing the ingestion, matching, processing, validation, and management of ESG data to us.
A-Team: Please talk us through how this technology works.
Tom: The solution addresses core challenges such as:
- How to integrate ESG data from multiple providers
- Mastering this data
- Implementing a hierarchy
- Reporting
- Efficient utilisation of ESG data across the asset manager
Additionally, Our ESG Data Management as a Service can assist asset managers in overcoming ever-increasing regulatory challenges, such as CSRD, TCFD, SFDR, and the FCA’s impending SDR regulation.
A-Team: How is it integrated into a wider data management setup?
Tom: “We have been able to integrate Sustainable1 data into our solution with an ESG lens. This has helped to create a unified data model. As a result, we have been able to build a robust integration process to harmonise disparate data formats and structures.”
A-Team: How was this solution developed?
Tom: We are an established global leader in data management, and our technology is embedded across financial institutions globally. We have been able to adapt our technology to address the evolving ESG data requirements of the industry. Not long ago, ESG issues were the purview of dedicated sustainability teams that built models and maintained their own data for very specific purposes. Now companies need to gather extensive ESG details to support investment strategies, financial analysis, regulatory reporting, credit risk management and to effectively evaluate overall risks and opportunities. ESG has become a cross-disciplinary area of responsibility with large volumes of complex data that are beyond the bandwidth of standalone sustainability teams. Therefore, our solution has developed as the sophistication of ESG and the requirements have increased. We have been able to integrate leading datasets and technology into one solution, which is compelling for clients.
A-Team: What benefits can clients expect to see from using this technology?
Tom: Our ESG Data Management as a Service includes:
- Connection to data providers: We have a library of connectors to third-party ESG data providers, as well as our own Sustainable1 datasets. You can choose data fields from the providers with which you have a licence.
- Aggregation: Data is aggregated from third-party providers and proprietary sources, across public and private assets, at the company, fund, and portfolio levels. You can compare scores and data attributes across sources.
- Entity hierarchy management: The service leverages our AI-powered cross-reference service (BECRS) and our classification standard (GICS) to match and master entities across data providers and surface hierarchy relationships.
- Mapping: Data is mapped to the fields required for regulatory disclosures (such as SFDR and TCFD) or to a taxonomy that aligns all sources.
- Universe of interest: You can opt to receive full datasets or subscribe to a universe-of-interest model.
- Exception management: Customisable exception management rules address data quality issues based on your specific workflows.
- Dashboards: Reporting dashboards provide visibility into the completeness of the available data for regulatory disclosures and bespoke outputs. You can also see year-on-year data trends for companies, funds and portfolios across data providers.
- Screening: You can apply both positive and negative screens to match ESG values and investment goals while also avoiding conflicting practices.”
A-Team: Considering the ESG space is in a state of constant change, can we expect updates to this product?
Tom: The combination of our ESG data, software solutions, and ESG/technology subject matter expertise is helping to transform the ESG data management landscape. The industry’s needs are always changing and our solution is growing organically as requirements and usage change.
Subscribe to our newsletter
