ESG data plays an essential role for many stakeholders in the ESG ecosystem. These stakeholders, from investors to companies, management consultants, and data aggregators, rely on timely, transparent, reliable, and accurate data to improve efficiencies in managing sustainability risks and opportunities and driving more informed decisions. The nexus of their differing incentives, utilities, and use cases lies with the digitization of ESG data.
The Benefits of Using Digitally Structured ESG Data
The use of digitally structured data provides numerous benefits for the ESG ecosystem. It allows companies to collect and analyze vast amounts of information quickly and accurately. It also helps them identify areas where they can improve their sustainability practices. Additionally, it enables them to compare their performance with other organizations in the same industry or region. Finally, digitally structured data can help companies identify trends in their ESG performance over time so that they can make informed decisions about how best to improve it in the future.
When ESG data is digitally structured, the data becomes standardized and comparable across time and companies. In addition, the benefits include greater transparency and traceability so you can rely on the data with confidence in its accuracy and validity to make informed decisions. The data is available in seconds for downstream analyses, not hours or days, so your decision-making is efficient and timely. Last but not least, digitizing ESG data minimizes human involvement in data collection, thereby reducing costs and errors.
Leveraging Digitally Structured Data for Return on Investment
Corporations
Corporations spend resources collecting data to measure ESG progress and report to stakeholders. Leveraging digitally structured ESG data, corporations can:
- Make informed decisions more timely to respond to ESG risks and opportunities.
- Effectively measure and monitor their progress toward the ESG goals and targets.
- Identify reporting gaps against ESG and sustainability reporting frameworks like TCFD, GRI, SASB, and SDG.
- Benchmark ESG performance against peer companies by combining ESG and Financial data with traceback to source documents.
- Research new ESG trending topics. For example, "How are peers communicating their cyber risk management policies to investors and other stakeholders?" Users can share findings with the internal teams and clients with idaciti’s unique Research Card Sharing capability.
Management Consultants
Large and small management consulting firms often work on projects to meet the specific needs of their clients. The keys to success include:
- Minimizing custom solutions.
- Identifying scalable ways to collect data.
- Automating processes to create efficiencies across client projects.
- Enabling collaboration between internal and external stakeholders.
These consulting firms can benefit from the digitization of ESG data in the following ways:
- Curate large amounts of high-quality ESG data efficiently by leveraging digital structuring technologies to meet clients' specific needs.
- Efficiently create custom reports using digitally structured ESG data.
- Increase profit margins for each client engagement by leveraging data collection and report-building automation efficiencies.
Investors
Investors need high-quality, timely, and traceable data to make informed investment decisions. Additionally, the business environment evolves rapidly, with new risks and opportunities emerging daily. Digitally structured ESG data provides investors with a competitive edge in the market in the following ways:
- Comparable, transparent, high-quality data in seconds, not hours or days.
- Trending ESG topics can be curated and structured in a scalable and timely manner so investors can research and respond to events in real time. For example, "How did companies with Russian operations respond to the war on Ukraine, and how were their Russian revenues impacted?"
- Access to high-quality data is cost-effective.
Data aggregators
As the amount of data in the world continues to grow, so does the need for new and improved data collection methods. Data aggregators face a challenge today - continue with their legacy data collection methodologies or leverage new digital structuring techniques to collect data? Modern data aggregation techniques are becoming increasingly popular as they offer numerous benefits over traditional methods. These new techniques can help organizations collect more accurate and reliable data and reduce the time and resources needed to complete a project.
Those that embrace the new technologies can increase their market share and dominance in the following ways:
- Curate and collect new ESG and financial datasets to respond to investor and stakeholder needs.
- Increase efficiencies and consistency in the data collection process through automation.
- Increase data quality and transparency in the data collection process to address current market concerns surrounding the opaqueness of ESG data and ratings.
- Reduce costs by replacing headcount with computing automation and increase revenues with new ESG data-related products and services.
Tap into the Hidden Opportunities of Digitally Curated Information for Maximum Benefit
The proliferation of iXBRL and the emergence of AI, ML, NLP, and Generative AI has enabled businesses of all sizes to gain a competitive advantage. Utilizing digital technologies can significantly improve the efficiency of mundane tasks, allow for more detailed data structuring and tracing, speed up and enhance data analysis, and generate more impactful content for reports.
Staying ahead of the competition in the ever-changing digital world is not an easy task. Digitally compiled ESG and financial data can help businesses uncover new opportunities in the market and capitalize on them quickly. This can significantly revolutionize how companies operate in the digital age, offering them an edge in a competitive environment.
