Technology and Data News and Events

The importance of big data in supporting ESG financing

by Mike Jones in Data Analytics 09/03/2022

Industry leaders are starting to understand the role that ESG has on how businesses operate; they are looking for solutions that help them manage their ESG analytics. Environmental factors have a significant influence on our quality of life as well as considerable financial implications. 

The cost of climate-associated disasters exceeded $650 billion between 2016 and 2018. This number is forecast to increase further, especially when factoring in the impacts of the pandemic on the global economy. Due to the financial impact environmental issues have, more governments and businesses focus on meeting ESG standards. 

In finance, businesses should be including various ESG metrics like ESG market analytics, risk assessment, compliance and portfolio management to manage the investment process. Meeting the different ESG standards is complex. ESG-focused procedures require accurate and updated ESG information, which is challenging to obtain due to fragmented, inaccessible and scarce data availability.

Businesses like tech startup Viridian are trying to mitigate these hurdles by creating a centralised information platform for the ESG market. Viridian utilises big-data analytics, real-time monitoring and AI-driven alerts.

Viridian use advanced technologies to one of the most pressing challenges facing humanity: the environmental crisis. Technology and data represent a vital element in tackling climate and environmental challenges. 

Many industry leaders recognise the risks we potentially face in the future, whether it be physical, financial, through business or new regulations. Today’s finance industry influences many industries and plays a vital role in the environmental movement.

In the finance world, climate and environmental risks convert into material business and financial implications, raising concerns for finance companies worldwide. The finance industry needs to adapt rapidly and incorporate environmental factors within many financial processes. Various climate factors, market trends and environmental performances have a significant influence on investments.

ESG needs to be incorporated into various financial processes to avoid any disruption and to remain competitive. The challenge that many financial businesses are experiencing is the lack of ESG and climate-related data needed for effective analysis and assessment. Obtaining this data is particularly complex due to the fragmented and inconsistent nature of ESG data. Data analysis is how new tech startups like Viridian can play an important role.

Applying innovative big data technologies, combined with advanced analytics and AI systems, businesses gather the most accurate and valuable information from multiple data sources and present the data clearly and insightfully. Viridian provides a knowledge graph that effectively bridges the gap between customers in finance or government to the array of relevant ESG data, which is vital for the new economy.

Enabling simple access to ESG data, emissions, pollution and compliance to evolving regulations is very important to the finance industry. Viridian provides a flexible analytics service, enabling consistent changes in data, which is ideal for sustainable investment and climate risk assessment since both continue to evolve.

Utilising wide-scale data collection capabilities provides businesses with an accessible platform that is particularly useful for the complex areas of the ESG and environmental economy sectors.

Climate change is becoming a growing concern, and more people are taking more responsibility to make changes. Businesses like Viridian are making their progress by providing a platform that will support businesses, governments make a conscious decision on the importance of ESG.