capco institute journal #56

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GEORGE GEORGIOU | Principal Consultant, Capco

In recent years we have seen the onus shifting onto financial services firms to implement structured methodologies and metrics to identify, assess, and validate their own environmental, social, and governance (ESG) credentials along with those of the companies they finance, invest in, or use as suppliers – in effect becoming the arbiters of sound ESG practices across global markets. Delivering that validation demands a deep-dive into data that encompasses both financial and non-financial activities in order to quantify positive or negative ESG-related impacts. 

However, the highly complex, interlinked, and global nature of the financial services industry means this is no easy task. Greenwashing, fragmented regulations, and diverse (and sometimes divergent) ESG measurement methodologies all clutter the pathway to clear and reliable ESG evaluations. This paper outlines approaches for assessing ESG data scoping and sourcing and sets out one specific approach/best practice for incorporating corporate ESG data strategies.