Financial Services Ireland


Why data is at the heart of the ESG journey for financial services

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As the ESG agenda evolves and climate change now posing a very real threat to the planet, Europe’s response is now becoming very real for financial services firms. Multiple regulations have issued, and sustainability disclosures mandated. Whilst the smorgasbord of requirements was emerging, it was a challenge for financial services firms to understand the extent of the impact on their data models. Now is the time for action, with ESG disclosures like the Corporate Sustainability Reporting Directive due early 2025 for the 2024 period. Fidelma, our Sustainable Finance Consulting Lead sat down with Mike Zehetmayr, ESG Data and Technology EMEIA Lead to delve deeper into the impact of ESG opportunities and requirements across Financial Services in Europe and the acceleration of the ESG data agenda.

The acceleration of the ESG data agenda

As the level and complexity of mandatory ESG disclosures grows, financial services firms are focusing on capabilities to meet these reporting requirements. Key among these is the collection, validation, and compilation of ESG data from clients as well as from the firms themselves, non-financial data that will require assurance on a footing similar to financial data. As Commissioner McGuiness recently said at the European Parliament plenary debate on the forthcoming Corporate Sustainability Reporting Directive (CSRD)  ”For the first time – we are putting sustainability reporting on an equal footing with financial reporting…and this is hugely significant”. In the video below, Fidelma and Mike discuss the broad topic of the data challenges of ESG reporting requirements.

ESG Data Challenges

As well as the challenges of capturing and reporting climate-related financed emissions, the focus is now turning to biodiversity restoration reporting. The Taskforce on Nature-related Financial Disclosures (TNFD), complementing the Taskforce on Climate Related Financial Disclosures (TCFD, calls for the biodiversity impacts of organisations to be quantified and understood. This poses a huge challenge for banks across Europe in terms of collating this data and processing it in a meaningful way. In the video below, Fidelma spoke with Mike about how financial services firms are approaching the challenges of investigating and disclosing their impact on the environment and on society.

Innovation in ESG reporting

Today there are more than 1,700 ESG-related guidelines and 600+ frameworks, including over 360 different accounting standards, some of which are mandatory and will become mandatory in the future.
In the video below, Fidelma and Mike discuss the data challenge for banks touching on how firms are innovating, particularly in the fintech sector, to meet the mammoth task of organizing all these overlapping data requirements. As Mike says, ‘Sustainability is not something we do on the side, it is integral to how financial services firms manage and grow their business.’

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When it comes to ESG, it’s important to develop a trusted team to help navigate this complicated, complex, and sophisticated landscape. Talk to one of our Sustainable Finance team today.