The Secret to Streamlining sustainability Reporting for Banks and SMEs
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September 16, 2023
min read

The Secret to Streamlining sustainability Reporting for Banks and SMEs

What can banks do to collect the right data to assess the risks in the best way?

Sustainability efforts are at the forefront of societal demands, particularly in the banking and small business sectors. However, ESG (environmental, social, and governance) reporting frequently presents a challenge. With cutting-edge platforms like 15Rock, a smoother, standardized approach is finally here.

Regulatory Pressure is Mounting

Banks worldwide are increasingly tasked with the responsibility to disclose extensive sustainability data by regulatory bodies. Such disclosures hinge upon high-quality data from their portfolio companies and customers. With stringent frameworks like the Task Force on Climate-Related Financial Disclosures (TCFD) deemed mandatory across many jurisdictions, the stress on banks to perform is relentless.

Central banks are now mandating climate stress testing scenarios, underlining the importance of sound ESG data for effective risk evaluation. Rapidly emerging policies in major markets from Europe to North America and Asia are stressing banks with the demand for comprehensive climate and ESG reporting.

SMEs Lack Resources and Expertise

In contrast to their larger counterparts, small to medium-sized enterprises (SMEs) often grapple with sustainability reporting due to a lack of dedicated resources. Customized ESG surveys posed by financial institutions impose a weighty burden that these enterprises are ill-equipped to bear.

The responsibility of providing detailed ESG data in multiple formats to each financial partner is unrealistic for these overworked SMEs. Adoption of standardization for efficiency and transparency becomes their preferred method. Yet, they can greatly benefit from guidance like that provided by 15Rock, which not only offers streamlined reporting but also lends valuable insights to SMEs aiding sustainability planning.

The Data Collection Struggle is Real

Banks face an uphill battle as they struggle with gathering complete, reliable ESG data from their SME customers. Surveys and questionnaires are hugely inefficient modes of data collection, with their low response rates further limited by the variability of data format.

Unstandardized ESG data collection places an added strain on SMEs, reducing efficiency on both sides. Transitioning to unified reporting frameworks could ease this burden and enable robust risk monitoring and analytics across portfolios.

The Eureka Moment: Standardized Reporting

Adopting standardized ESG reporting mechanisms like 15Rock is the game-changer. By providing structured datasets for SME portfolios, standardized reporting benefits both banks and their clients alike. SMEs can now complete a single disclosure catering to multiple stakeholders.

15Rock's advanced platform offers banks the advantage of collecting ESG data from SMEs based on globally accepted reporting frameworks. This data can then plug directly into the bank's systems for quick and easy analysis.

Automated Collection and Analysis

Introducing automation to the mix is the next big step. With seamless data integration into banks' systems, 15Rock aids in providing comprehensive risk analysis and strategic decision-making. SMEs' ESG data can be efficiently accessed by banks, enabling them to monitor sustainability risks across businesses and geographies promptly.

Aggregating these datasets empowers banks to predict sustainability risks and uncover areas of opportunity across all business lines. Incorporating advanced analytics and AI into the process elevates the analytical capability further, identifying data gaps, inconsistencies, and potential paths to improved ESG performance.

A Win-Win for Banks and SMEs

By leveraging automated data collection and streamlined reporting protocols, banks and SMEs can benefit in multiple ways: simplified processes, accurate risk analysis, regulatory compliance, and building meritorious, sustainable partnerships.

Platforms like 15Rock help surmount hurdles in ESG data management, delivering the information for risk assessment, stress testing, and insightful decision-making. SMEs can enjoy an uncomplicated, unified process that promotes sustainability awareness.

By integrating advanced analytics, banks build a comprehensive overview of ESG factors and are provided credible transition pathways across lending portfolios. SMEs, as a result, receive insights into impactful steps for improving sustainability performance.

Embracing standardized, automated reporting can tap into the potential of ESG data for banks and SMEs. Turn ESG disclosure from a burden into a rewarding opportunity. Ready to simplify your ESG Reporting? With 15Rock, you're not just another informed user - you're part of the change. Join us in our quest for a sustainable future.

Sign up for our services today, and let's shape a greener future together. Reach out to our team at 15Rock for a free trial or chat with us for more information on our advanced solutions.

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