Leveraging Technology to Navigate the ESG Reporting Labyrinth: A Win for Banks and SMEs
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September 16, 2023
min read

Leveraging Technology to Navigate the ESG Reporting Labyrinth: A Win for Banks and SMEs

it's getting harder and harder for banks to collect data from customers related to ESG that shows them their risk.

As regulations around climate and ESG reporting tighten, banks are looking for solutions to gather comprehensive data effectively. What they've found not only solves their challenge but also offers immense benefits to their small business customers.

Reporting Demands Are Skyrocketing

Regulatory bodies are insisting that banks enhance their Environmental, Social, and Governance (ESG) disclosures. There's a global surge in reporting requirements, thanks to mandates like the EU's Corporate Sustainability Reporting Directive (CSRD) and the potential disclosure rules proposed by the SEC.

Further amplifying the need for transparency, investors, regulators, and customers are increasingly seeking in-depth sustainability insights. Large asset managers are on the hunt for detailed metrics to enable precise risk and return assessments. Banks need a system prepared to handle the demanding scope of data collection spanning business lines, geographies, and customer bases.

Data Collection Presents Unprecedented Challenges

While banks understand the vitality of robust ESG data, its collection presents a formidable challenge. This becomes more profound when their customer base includes thousands of small businesses limited by sustainability resources.

For Small and Medium Enterprises (SMEs) in particular, responding to multifaceted sustainability questionnaires from financial partners can be an overwhelming task. However, using custom forms for data collection results in low response rates and inconsistent data quality for banks, causing significant reporting gaps and potential overlooking of vital exposures.

Standardization is the Key

The way forward for banks lies in the standardization of sustainability reporting frameworks. This enhances their ability to streamline disclosures from both large and small business customers and gather structured datasets.

Frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) – aligned with global expectations and widely adopted – allow banks to standardize and gather high-quality ESG data.

Cue in technologically advanced solutions like 15Rock, capable of providing banks with ESG data from SMEs based on these standardized frameworks. With a simplified process, SMEs can contribute to the data collection, enabling banks to gain clearer insights into sustainability risks.

Automation Drives Unparalleled Value

Implementing standardized reporting is just the beginning. Banks also stand to gain significantly from automated solutions to collect high-quality ESG data efficiently and provide portfolio analytics.

15Rock, with its integrated platform, allows end-to-end, efficient ESG data collection on a much larger scale. It uses advanced machine learning to evaluate risks and guide improvement plans tailor-made for each business.

Banks can unlock the true potential of sustainability data with 15Rock. The comprehensive view of ESG factors across the business that it provides enables banks to meet reporting demands and aids in making strategic, informed decisions.

Shared Benefits Emerge

As banks find their path through the ESG labyrinth, they also create value for small business customers. Thank the streamlined, unified reporting process for this.

The simplified approach offers even the tinier sustainability teams the ability to efficiently provide disclosures across all financial partners. Guided assessments by a platform like 15Rock help SMEs benchmark progress and manage their strategic improvements effectively.

Banks demonstrating forward-thinking recognize that solving their ESG reporting challenges fosters shared value with customers. Indeed, collaboration and standardization can conquer the hurdles of managing risk in today's fast-paced environment.

Investing in technology solutions like 15Rock can provide banks and businesses the advantageous upper hand in navigating the labyrinth of ESG reporting.

Witness the transformative power of AI-driven insights and sign up for a free trial of 15Rock today. Unleash the power of unified, comprehensive ESG data at your fingertips. Welcome to a future of informed, strategic decision making with ESG data collection and reporting made easy.

Crack the ESG data labyrinth – with 15Rock.