Sustainability – once a buzzword, now key to success

How to effectively manage ESG data

Sustainable investment decisions are based primarily on understanding the available information and interpreting it correctly. Enriched by the opinion of the financial service provider, real added value is created for the customer which makes a significant difference.

Sustainability is one of the most important topics of our time and thus also on everyone's lips in the banking and financial industry. However, just talking about it is not enough. Real evaluation skills and value-creating actions are required if one wants to credibly face one's customers on this topic as well, provide them with the right information in a timely manner and empower them. More and more investors want their bank to have a truly sustainable investment strategy. They attach importance to reliable ESG data and expect a fully comprehensible decision-making basis. Achieving a good financial return on investment is no longer sufficient. Both institutional and private investors want more: thinking and acting consciously with an eye to the future to the benefit of society and the generations to come. Numerous banks and other financial market players have long recognized the signs of the times. They assume responsibility by not passing on the available data to their customers unfiltered, but by analyzing, questioning, assessing and enriching it with additional information, thus providing their customers with the best possible basis for a qualified decision.

 

How to turn your opinion into the right strategy for your customers

Ideally, customers see the consultant as an expert, also with regard to advice on sustainable investments. They expect you as a financial service provider to represent your own, well-founded opinion at all times and also to be able to explain it. A mammoth task when considering how much information has to be taken into account on a daily basis. Those who are able to efficiently process the wealth of ESG data and balance it with the values of their clients will develop the right strategy for them. Sharing the results with your own employees in a targeted manner is also crucial. This is the only way to make sure that they are always able to react effectively to changing situations and advise their customers appropriately. Partly manual solutions (keyword «Excel trap») are not recommended. They are too error-prone, too time-consuming and thus not cost-efficient enough.

 

Power also implies responsibility

Your lead in knowledge and your consulting expertise give you the power to significantly influence the decision of your customers. A great deal of power always comes with a great deal of responsibility. When it comes to sustainable investments, this statement is true in more ways than one, because in addition to generating an attractive return, they have a positive impact on our society and our future. Conversely, the incorrect processing and assessment of ESG data also involves a risk that should not be underestimated. If the assessment of data or its comparison with the in-house opinion is erroneous and incorrect investment recommendations are made on this basis, this can have far-reaching consequences that go beyond reputational damage or loss of returns. To prevent this from happening, it is worth investing in an automated solution tailored to your needs.

 

Make a tangible difference

In addition to many other benefits, AdNovum's ESG Rating Tool makes it possible to flexibly integrate ESG data from different external data providers and combine it with your individual parameters and algorithms to determine the bank's own sustainability rating. The control interface of the ESG Rating Tool can be easily tailored to current needs at any time. The data is evaluated within a few minutes and the results can be provisioned directly into existing systems or interfaces. Sustainable IT solutions of AdNovum are designed to meet your specific needs. With our holistic sustain-build-buy approach, we help you identify the perfect combination of these three strategy elements and achieve the best possible result for you. In doing so, we focus on a future-proof, flexible and agile implementation.

 

This text was originally published in German on www.finance-forum.li.