Data plays an important role in the process of bringing about climate and social change – and in mitigating the activities that deepen those problems. Financial institutions will need new data sets, new insights, and new ways of gathering information to comply with the EU ESG regulations. These requirements will put enormous responsibilities on financial institutions. They will need to obtain and manage data they are unlikely to have readily on hand.
Gathering the data is one issue – managing and applying governance structures over it is another. ESG data is not like price and other reference data, for which most financial institutions have long-established data management processes. ESG data must first be standardized and structured so that it can be integrated with financial data, included in regular reports, and made ready for further processing by artificial intelligence and other sophisticated software.
Both the gathering and the management of data will put great operational and financial strain on a large majority of financial institutions. For that reason, a better route would be to engage a company with a tried and trusted record in the sourcing and management of regulatory datasets.
With more elements of the SFDR and EU Taxonomy coming into force at the start of next year, it is important for financial institutions to think now about how they want to position themselves for the future in terms of ESG data.
Download the full version of our special report to learn more about how to overcome the challenges of the EU ESG regulations and how SIX can help.