A new project that could help your ESG efforts

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We all know that climate change is a critical topic for all of us. COP27 couldn’t be clearer on this. But organizations are having to learn how to report and manage their impact and influence on the planet, and this can be a complex process to manage.

A key part of reporting and managing climate change is to have a shared taxonomy so that you, your regulators, your suppliers, and your customers all understand your impact.

Sadly, in the case of climate change, that is not as simple as it would be in an ideal world because across the globe, regulators and governments have implemented a bewildering range of regulations, standards, frameworks and laws.

This means it can be difficult to be confident that everyone is speaking the same language.

To help overcome this, Solidatus is a contributing partner to the Open-Source Sustainable Finance Taxonomy Project.

The aim of this initiative is to create a global, open-source and available-to-all resource that holds global taxonomies that will allow all organizations to improve the understanding of the requirement to help standardize the language used in climate change.

Launched last month in Dublin, this resource is now available on GitHub to any organization wishing to understand a wide range of climate change and sustainable finance taxonomies, including ISSB accounting standards, the SFDR and TCFD frameworks, and a host of other key taxonomies such as NACE and NAICS industry categorizations. This resource will grow over time and includes cross-mappings between the key taxonomies.

Each of these taxonomies are available as downloadable text files and in addition represented as Solidatus models which allow users to visually:

  • Understand the structure in each taxonomy
  • Understand the relationships between different taxonomies
  • Focus in on the similarities, overlaps and differences between key taxonomies

These visualizations are available to view for all users. However, Solidatus clients can also download these models and import them within their Solidatus instance as a reusable resource and a key component in linking the taxonomies with their internal business processes.

This approach will deliver a platform to demonstrate to regulators and auditors how you are meeting climate change reporting requirements.

The links to these taxonomies are below.

Please contact Solidatus at hello@solidatus.com if you want to know how to best use them within your organization.

Organizations that wish to get involved in the open-source Sustainable Finance Taxonomy project can do so via the partner page on the GitHub site (link below). The more partners we have involved, the more valuable this shared resource will be.

Solidatus are proud to be doing its part in the fight against climate change by being a founding member of the First Global Project for Open-Source Sustainable Finance Taxonomy (‘OS-SFT’), and we forward to working with you on this in the future.

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Screenshot of the relationship between TCFD, EBA Pillar 3 and ISSB, highlighting the added value of linking topics across these taxonomies within Solidatus

Further reading

Open-Source Sustainable Finance Taxonomy
According to its GitHub page, the “objective of the project is to provide the marketplace with the following open-source, practical tools to advance user implementation of sustainable finance data systems into business operating models for new and evolving taxonomy frameworks, standards, regulations and laws”.

See https://github.com/FD-SustainableFinance/0-OS-SFT-OVERVIEW.

Open-Source Sustainable Finance Taxonomy Partner
See https://github.com/FD-SustainableFinance/06-COLLABORATORS-PARTNERS.

UN Climate Change report
See https://unfccc.int/news/climate-plans-remain-insufficient-more-ambitious-action-needed-now

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“If we do our jobs right, we can save the planet.”

Our Co-CEO Philip Miller gave us some serious food for thought at the recent A-Team ESG Data & Tech Summit in London.

In his keynote speech, ‘7 things you need to know about ESG’, Philip talked us through the challenges of ESG as it stands today, how it is constantly developing and why it’s imperative organizations create and implement the right strategy to ensure future compliance.

He raised some insightful points for the audience to take away with them:

  • We need to live and breathe a data-driven culture in businesses, so that ESG becomes part of a holistic company mindset – making it everyone’s responsibility
  • Organizations have to publish a strategy that holds up to public scrutiny as the court of public opinion will come to bear on ESG initiatives
  • As our CDO, Lorraine Waters, said earlier during a panel discussion at the same event, “it’s difficult to model the ever-evolving regulations without the right tools”. The Solidatus solution can give you the control points to get good returns while helping you save the planet

Hear more from Philip by watching his keynote speech on-demand now:

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At a recent keynote speech in London, Solidatus Co-CEO Philip Dutton said that “the demon of complexity is the thing we’re all struggling with.” But do the trappings of pivoting towards a more data-driven business really have to be so complex?

The answer to that, quite simply, is no. They don’t. In fact, having the right data blueprint can not only eliminate complexities but also support and accelerate growth. And at the A-Team Data Management Summit, Philip looked deeper into this.

Noting that we may not have control over certain events in the world that can change the very fabric of how we operate as businesses, countries and even people, we can position ourselves to be adaptable to change and even lay foundations for innovation.

In his keynote, Philip discusses:

  • how agility, innovation and disruption can be achieved
  • why this is so important as the digital world continues to transform at a rapid pace, and;
  • who can provide this kind of intelligible, future-proof blueprint

Watch on-demand now to hear his insights:

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Meeting the requirements of Environmental Social Governance (ESG) criteria marks a commitment to building a more sustainable organisation and ultimately a climate positive company. But with so many standards, disclosures and rating methods, alongside the new data sources required to meet them, how do you understand how data requirements intersect whilst maintaining high-level control?

Using Solidatus, you create living blueprints that map how your data flows, and how it’s affected, as it moves around your systems – both now and at other points in time. A Solidatus data lineage blueprint brings together ESG principles, company priorities, assessment methodologies and data sources and metrics to give a full end-to-end picture of the impact of ESG initiatives.

To comply with regulations relevant to its manufacturing activities, a global luxury fashion house with a cosmetics line has been required since 2020 to produce both its Climate Report, and report on its carbon footprint.

For each report, it has been collating information about people, processes and systems in a series of large Excel spreadsheets – these are challenging to analyse, and difficult to interpret or use to define action points.

The company needed to find a way to streamline and automate its processes, and track progress throughout the year, so it could make adjustments if it was in danger of missing its targets. This is why it came to work with our partner, Ortecha, to help automate its Climate Report, part of its ESG (Environmental, Social, and Governance) reporting suite.

Read the full case study to understand the technical steps Ortecha carried out to structure and explore the contents of the company’s many Excel spreadsheets.

Ortecha used our powerful data lineage functionality to structure and explore the contents of the company’s many Excel spreadsheets

Using our multidimensional data mapping functionality, Ortecha was able to show the company the hidden connections in the data used for their Climate Report and the key data points that could be fed into an automated process. A clear analysis of the company’s Climate Report data was produced. This resulted in:

  • the automation of key data points
  • increased frequency of the Climate Report publication
  • improved efficiency of the report production
  • reduced risk of missing a target and the associated reputational damage
  • a road map for implementing improvements.

Repeating the analysis for the company’s other reporting challenges presents further opportunities for consolidation and automation.

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Luxury fashion house automates ESG reporting

A global luxury fashion house with a cosmetics line is using Solidatus to map its environmental impact and automate its climate report.

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For the Chief Data Officer there’s a lot open to interpretation when it comes to their environmental, social and corporate governance obligations and objectives. Here are 7 areas that are key to successful ESG strategy and practice.

The ‘Why’

1. ESG needs to 'live’ in business structures and data cultures

If you view ESG as a simple box-ticking exercise that a business needs to comply with to appear more environmentally conscious, you risk facing more serious challenges down the line. If an ESG strategy isn’t well thought out and all-encompassing, it will not only make the implementation process harder but will leave gaps in the dataset when more stringent standards and requirements are developed. For the CDO, recognising that everyone within an organization has a responsibility to the data will help embed a culture around ESG that is built into business mindsets and structures.

Mistrust and the burden of regulations

For most companies, it’s common for stumbling blocks to appear within data sourcing and governance. With no clear standards and ongoing changes in regulations, transparency throughout an organization with clear objectives is key to overcoming ESG data challenges. The CDO knows they must first get a handle on their data and understand how it flows through the company.

Processes need to be streamlined and automated, with progress diligently tracked to avoid missing targets. The ability to uncover hidden connections in the data as well as key points that can be fed into an automated process can improve efficiency of reports and provide a road map for implementing improvements.

3. ‘Greenwashing’ is a thing and it’s detrimental to your organization’s reputation – transparent reporting protects against it

Businesses that ‘greenwash’ give false impressions that they are more environmentally sound and conscious than they really are. Their products and ethos don’t match what they are saying externally, and this is often uncovered in their own reporting. Making sure reporting is accurate and transparent from beginning to end – even if it doesn’t always match your desired ESG objectives and goals – can help an organization avoid misleading the public and potential investors.

The ‘How’

4. ESG reporting is evolving all the time so current frameworks and strategies will need to evolve too

Factors such as climate change, sustainability and social governance continue to advance, so standards and reporting are evolving with them. Frameworks need to be formed on transparency and innovation, not remain rigid. So as reporting continues to shift and develop, strategies move with them and continue to yield credible results that are easy to interpret.

5. In the absence of industry standards, internal standards are key

One of the best ways to demystify the complexities around ESG and the lack of standardization is to create and implement internal ESG taxonomies – thoroughly understood throughout an organization – to avoid ambiguity. Agreeing on well-defined internal standards, requirements and policies can help businesses clear up uncertainties in data strategies, as well as make it easier to reach ESG objectives.

6. It’s important to be innovative – the right software helps you meet requirements and create scalable solutions

For the CDO, horizon-scanning is incredibly important. Researching and understanding new technologies will keep businesses ahead of the innovation curve. By integrating an organization’s metadata with an agile cloud-based platform, ESG initiatives can be tracked and reported on against relevant ESG standards and disclosures.

The ‘Who’

7. A data blueprint can show you how your data flows around your organization and give you transparency on its context and the people and processes that impact it

Given its complexities, it’s so important that ESG data in an organization is clear and linear. It needs to be reaching the right people at the right time, as well as flowing into the correct processes. With the Solidatus solution, you can build a data blueprint that gives your business the visualization of your data that you need to ensure it is moving into the right places, giving a strong foundation for not only current compliance needs but to uncover opportunities that will enhance your overall strategies and approaches to ESG.

Solidatus gives businesses the power to build and implement successful, future-proof ESG strategies that not only help them manage and visualize data to achieve regulatory compliance, but to more importantly leave a positive and lasting change on the planet – which is the goal no organization can afford to lose sight of.

Get a free preview of Solidatus to learn more about how our solution can help you build your data strategy and achieve ESG goals:

Explore the power of data lineage with a free Solidatus trial

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“The immediate challenge with ESG is to present something that is at least understood and defined for yourself. If you can explain what you are putting forward as a global entity in the first instance, you have hope.”  – Philip Miller, Chief Innovation Officer at Solidatus.

A poll at the recent A-Team ESG Insight Briefing revealed the biggest challenge around successful ESG data sourcing and management is the lack of standardisation across data sources. Unfortunately, the industry has known this is the case for quite some time, and whilst many been positive moves forward have been made to unify and simply standards, the same challenges still remain.

Regardless, the need to stay ahead of the curve on ESG – not just ‘green-thinking’, but tackling the social and governance too – is imperative to building a successful, future-proof framework now. So how can organisations tackle these issues to ensure that they are ready for when true compliance and harmonised standards take effect?

Philip Miller sat down with A-Team Insights alongside Navin Rauniar from PRMIA London Chapter, Hany Choueiri from Aldermore Bank, Lynn Watts from Royal London Asset Management and Fraser Hall from AxiomSL to delve deeper into these challenges and how they can be addressed by;

  • Understanding data metrics and who within an organisation is responsible for defining them
  • Ensuring internal language of ESG is well defined to avoid data ambiguity  
  • Organisations need to understand where they are at generally in terms of their own management of data, so it can be adapted to ESG frameworks and reporting
  • Horizon-scanning: know what changes and developments are coming in the future so it can be applied to current frameworks and strategies 

To find out more, watch the panel ‘Addressing ESG data and reporting challenges‘ on-demand now:

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Practical strategies for meeting ESG obligations

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Organisations around the world know that the significance of ESG is rising every day – and where once the E, the S and the G were initially separate, they are now being seen as collective initiative to achieve data standards.

Data is the key to being able to track all the way back to the recommendations and principles, through all the movement in organisations. To achieve this, there needs to be a collective effort within a business – from multiple teams, across multiple functions and jurisdictions.

If organisations don’t get the data right, the impact of ESG will be felt far and wide, with practical challenges manifesting themselves in the development and implementations of effective ESG strategies.

In our first ever ESG whitepaper, we explore best practices when it comes to the development of an internal framework for identifying people and teams responsible for meeting ESG obligations; interpretation of rules and regulations to define the obligation; and defining the deliverables to meet the obligation.

This whitepaper also takes a deep dive into the following;

  • The ESG investing landscape and how best to respond to its major challenges
  • Contextualising ESG initiatives and establishing organisational-wide understanding
  • Building a successful ESG program and refining a data strategy
  • The benefits of the Solidatus ‘lineage-first’ compliance solution
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Solidatus has been chosen by the UK Department for International Trade (DIT) as one of 11 UK-headquartered FinTech companies to join a virtual trade delegation to New York Climate Week from Monday, 20 September to Friday, 1 October 2021.

The constant rise of ESG has created a mandate for the FinTech and RegTech companies of the world – as organisations race to become compliant against a backdrop of vague standards and complex data, the need for a clear, concise and innovative solution has become paramount.

With one in $3 invested in ESG and sustainability across the United States, it’s easy to see why the need has become so great. Alongside other pioneering UK firms specialising in ESG, we will be showcasing our award-winning solution to further accelerate the financial industry’s ESG and sustainability goals – from achieving net-zero, to enabling climate action – all through the use of new and emerging technologies.

Speaking about this thought-provoking mission, Kunal Khatri, Her Majesty’s Acting Trade Commissioner for the US comments, “The UK has been at the heart of global financial services innovation for decades, and as we lead up to the COP26 Summit in Glasgow, UK companies are poised to play an even greater part in driving ESG and sustainability across the financial industry. Fintech in particular will have a crucial role to play in achieving net-zero by spurring green innovation and expertise into sustainable investments, by providing companies with better tools to measure and mitigate their climate impact, and by giving consumers the information they need to make more informed decisions. The UK has world leading talent, technology and businesses with an enormous amount to offer to the US market we are excited to bring this delegation of cutting-edge technology firms to New York Climate Week”.

We look forward to working with truly trailblazing tech companies from across the UK to not only enable the financial services industry to better understand their data, and build and develop successful ESG and sustainability strategies, but to be a part of a mission designed to protect our environment and bring about positive change for the future.

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“Data is increasingly the lifeblood of modern business, and understanding its flows throughout an operational structure can be vital from compliance perspectives, and also indicate where efficiencies can be made and systems optimised.”

Solidatus’ Chief Data Officer, Lorraine Waters, recently sat down with the team over at Business Express to discuss the growing influence ESG is having on businesses – both big and small, start-up and scale-up – across all industry verticals.

Investors want to see hard evidence a business is ESG-savvy; consumers want to know the brands they buy from are are ethically and morally sound, and are doing their part to help make a positive change environmentally and socially.

The easy part is knowing that having an ESG strategy is now crucial and needs to be carefully thought through and implemented. The hard part is the implementation. With so many varying and inconsistent standards in ESG driving data gaps, the resolution isn’t clear cut.

That’s where a solution like Solidatus comes into play – “providing a straightforward way to indicate the source and passage of information throughout the company infrastructure from source“.

Check out Lorraine’s article for Business Express: ‘Exploring the long operational reach of ESG data‘ to find out what she as to say about ESG and the lasting impact it will continue to have on businesses:   

Exploring the long operational reach of ESG data

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In recent years, the world has woken up to the fact that serious action needs to be taken by governments, businesses and people alike if we want to achieve just this one goal – make our planet a better place for everyone.

It’s a topic that has caused controversy and conflict, despite our common goals. We are all working towards the same outcome and taking personal responsibility for our own imprint on the world. From refusing to buy plastic, to becoming plant-based or even transitioning to electric cars, we are all doing our bit towards repairing the damage caused by generations of humans.

And the buck doesn’t stop with individuals, or even governments. Businesses have had to look within and have honest conversations at management level about what they could be doing better, where their values lie and how important creating change is to them. Especially when it comes to investment.

This is why ESG (Environmental, Social and Governance) has become one of the fastest developing set of principles in the history of capital markets. Societal change has effectively shone a light in the eye of organisations of all sizes around the world and held them accountable. It has forced many firms to take a hard look at ESG, despite the fact it has been around for decades, and strategise how to weave its requirements into how they do business. And it’s not just public scrutiny into how corporations achieve this, but investors also.

Everyone who has dipped their toes into the pool of ESG and ESG data knows that there is still a serious lack of clarity around standards and reporting measures – despite the fact investor demand in ESG-centric businesses continues to increase. We know the ESG landscape is broad, diverse and complex. Many companies have taken to “greenwashing” – where they outwardly appear to prioritise environmental and social issues, but fail to truly do so within the confines of their own four walls.

Some companies have inadvertently chosen “short-termism” – fixating on managing for the short-term rather than the longer-term. Which means many of their current ESG initiatives are not future-proof, non-beneficial and will not hold up against true standards and regulations when they are enforced.

With so much ambiguity, how can any business truly say they are ESG-focused, driven and compliant, no matter how strongly they feel about it?

The truth is, many can’t just yet. And this is why we have worked with the A-Team Group to put together the first ESG Handbook, designed to cover all elements of ESG, from an initial definition and why ESG is important, to existing and emerging regulations, data challenges and solutions, regulatory reporting requirements, industry initiatives, and the call for global and consistent standards for sustainability reporting.

This new, first-of-its-kind handbook delves into the several important and pressing topics:

  • The scope and definition of ESG
  • Existing and emerging regulations
  • Firms subject to the rules and regulations
  • Data types and data challenges
  • Regulatory reporting requirements
  • The need for data and reporting standards
  • Where next for ESG and market participants

It also offers step-by-step action plans for data management and the correct regulatory reporting to help achieve ESG best practice, as well as an outlook into what is next for ESG.