A new SEC proposal will make publicly traded orgs disclose ESG data like environmental impacts and workforce stats. Many anticipate challenges to compliance, but a new approach to data synthesis is here to help.
2023: The Year of ESG
2023 is shaping up to be a significant year for environmental, social and governance (ESG) reporting.
The SEC has an ambitious 2023 regulatory agenda, the most significant being a requirement for publicly traded companies to disclose ESG data for investors, much like they do financial information. If approved, this will set a precedent for organizations, public and private, world-wide.
Monitoring ESG data makes for good business strategy, not only for brand and reputation, but also for operational efficiency, human capital development, and risk management, all of which are key drivers of long-term value and sustainability.
Yet, this raises an important question: How will businesses synthesize the data needed to report and comply?
The Challenge with ESG Data
There are several key challenges with ESG data.
- It’s continuous and real time, meaning data is constantly being produced from a variety of sources, and the numbers are always changing.
- The data is heterogeneous, meaning there are many different types of data. Carbon emissions data (E) is different from workforce and human rights data (S), which is different from corporate board and compensation data (G). Some of the data is numeric, some is categorical, and nearly none of it is available at the same level of granularity.
- Some of the data may be subject to privacy regulations that cannot be shared across borders or must first be anonymized.
- Much of the data is siloed or lives in disparate data sources, such as legacy databases, applications, SaaS solutions, and sensors, in different storage environments, including cloud, on prem, and edge.
- ESG data reporting requirements are evolving and dynamic, meaning its highly likely new data sources and analytics will be needed as the business evolves.
There are plenty of off-the-shelf SaaS apps designed to track ESG data, but they often only solve part of the problem (e.g. carbon emissions only) and place limitations on their APIs. Moreover, what if you’d like to build a machine learning model from your data? There’s not much flexibility there.
The end result is significantly more work for IT departments. To comply, companies may need to implement new technologies, hire additional staff, and expand their data management and reporting capabilities. CFOs take note: that is a substantial increase in spend and time allocated for reporting.
Ensign for ESG
We built Ensign for exactly this purpose: to break down data silos and automate data flows, no matter where data lives.
Ensign is a secure data collaboration platform for IT teams to quickly set up tuneable data streams (we call them FlexStreams) for real-time apps and analytics. As a fully managed platform, Ensign comes with a database and all the requisite features of a database (security, persistence, atomicity) as well as features that make data collaboration across teams less bureaucratic (like multilingual SDKs and dashboards).
Ensign is designed to meet the growing complexity and diversity of data types, environments, use cases, and interfaces. As a cloud native, cloud agnostic managed solution, Ensign doesn’t require additional infrastructure or specialized skills (think: low-ops/no ops). All you need is a use case, an API key, and a few lines of code.
Focus on Your Differentiators
One way or another, companies will have to manage ESG impact. Why spend your valuable time, money, and energy trying to figure out how to make data accessible if Ensign makes that part easy? Offload the data routing and focus your efforts on building the right reports, analytics, and models that truly move your business forward.
Your business, and your data, is unique, and we at Rotational believe the tools you choose should adapt to your business, not the other way around. Learn more about how Ensign can help your team with ESG reporting by dropping us a line or registering for an upcoming webinar!
Photo via Unsplash from Christian Buehner.