How CFOs Should Assess Materiality in ESG

The dominant discussions in ESG or corporate sustainability were once about “winners and losers.” These discussions are now deprioritized. Given the pace of change occurring in the regulatory domain, it’s not about lists and box-ticking anymore.

A recent example of this is the European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD). Now, the CSRD has tightened the screws and 50,000 companies in the EU will be required to start disclosing on the topics that matter most to them. But what makes the potential global impact of the CSRD so special is the prominence of the concept of “double materiality”.

Read Marjella Lecourt-Alma article about the dominant discussions in ESG or corporate sustainability on Strategic CFO 360.

How FinTech Can Built Trust in ESG

FinTech will play a leading role in the shaping the future of sustainable finance and investing over the next decade because of two powerful factors: First, FinTech has created, and will continue to innovate, the financial platforms and user experience that Millennials and Gen Z now take for granted; Second, FinTech will play a critical role in making sure this new generation of investors trusts the companies, stocks and funds they invest in.

FinTech Alliance's special report, in partnership with White & Case and PwC, examines the current problems in measuring ESG outcomes and holding companies accountable, and looks at 20 of the most exciting FinTechs making a real difference in the space.

Why G7 backing TCFD is ‘enormously important’

The big questions for TCFD’s future include how soon will G7 and other governments start making disclosure mandatory. And if enacted, will companies be prepared to meet TCFD requirements?

Four jurisdictions have already said they will require TCFD disclosures — Hong Kong, the UK, New Zealand and Switzerland — and more are expected to join them by November’s COP26, the UN climate change conference in Glasgow.

The TCFD is not without its critics, however.

Last Friday, ECB president Christine Lagarde said the TCFD reminded her of the “soft touch” regulation of the banking sector in the run-up to the financial crisis.

This is a sign of a growing split in the ESG accounting world, said Marjella Lecourt-Alma, chief executive of ESG data platform Datamaran.

Sustainability Priorities for the North American Electric Power Industry

The Electric Power Research Institute (EPRI) published an assessment of AI-enabled sustainability solutions, aimed at understanding the similarities, differences, and complementarity between a traditional, manual approach to identifying sustainability priorities and an AI-enabled approach

Takeaways:

1) Of the AI-enabled sustainability services that EPRI assessed, Datamaran was the only company to provide a materiality assessment and was the service most tailored to internal corporate sustainability activities

2) While it is recognised that AI solutions can appear costly, they are still cheaper than manual approach, and the benefits they offer are wider, allowing to save time, tap into a wider amount of sources and to do a rapid refresh of the analysis.

Leading Sustainably 

While much of the responsibility for sustainability transformation has been aimed at the c-suite, it’s clear that this fundamental organisational shift will be impossible without full buy-in from corporate boards. However, where do boards actually stand on sustainability?

One leading solution that boards can look to is Datamaran, the only software analytics platform in the world that identifies and monitors external risks, including environmental, social and corporate governance (ESG). CEO Marjella Lecourt-Alma elaborates on the fundamental role data plays in the sustainability story: “As investors probe more and more for ‘ESG-washing’, board members need to make sure that material ESG risks are embedded at the core of their businesses. This can only be achieved by ownership of these risks at the top level, through a systematic risk management and reporting process, backed by credible data.” 

ESG due diligence, from societal to environmental topics

"ESG due diligence is destined to integrate more and more with traditional due diligence, and will move investment choices in the coming years."says Bruno Giuffré, partner at DLA Piper. He adds that "sustainability will weave ever closer ties with risk management and innovation, enter the Boardroom, and change the remuneration policies of the top management of companies".

DLA Piper launched the first ESG due diligence projects last year in Australia and Korea thanks to the partnership with Datamaran, and has just expanded its offer to Italian customers. It will allow insights based on objective data and an almost real-time assessment of ESG risks, also in relation to the sector and geographical area. "In this way - concludes Giuffré - ESG due diligence will be integrated with risk management in corporate, financial and any type of transaction" activities.

Article in Italian

Qwick Takes: ESG investing is heating up

Talking Biz News Deputy Editor Erica Thompson reached out to experts to inquire about ESG investments, an area turning into the hottest new trend on Wall Street.

Ian van der Vlugt, VP of Product and Research at Datamaran:

The growth in ESG investing can be ascribed to a realization in the market that doing good does not have to be at the cost of seeing returns; that external risks, including ESG, are real, dynamic, and can have huge impacts if unmanaged; that ESG also presents ample business opportunities; and that investment choices can effect real-world change.

Investors Hoist ‘Pitchforks and Torches’ Over Archegos Losses

The chair of the risk committee at Credit Suisse Group AG resigned ahead of the Swiss bank’s annual meeting Friday. Prominent investors at the bank had announced they were prepared to vote against him — an atypical move.

Since the collapse of U.S.-based hedge fund Archegos Capital that left Credit Suisse with a loss of close to $5.5 billion, there has been a shakeup among Credit Suisse’s leadership team. Media reports estimate another $1.5 billion loss for Credit Suisse’s dealings with Greensill Capital after the supply chain finance firm filed for insolvency in March.

Stakeholders turned their attention to the board to demand accountability.

“If he had started in 2021, that would be different,” says Ian van der Vlugt, VP of product and research at risk management company Datamaran. “Mr. Gottschling has been in this position for a number of years and has kind of been responsible for a number of these scandals. Now, investors are saying enough is enough.”

Investors Clamor for ESG Data ‘Comparability’

As investors continue to put a magnifying glass to companies’ environmental, social and governance (ESG) performance, boards need to ensure material ESG data is properly tracked, sourced and vetted before making disclosures, sources say. Investors want to be able to compare that data across multiple companies, and without a standardized disclosure regime, it’s not easy. As a result, companies are being hit with shareholder resolutions for more data, and they are also fielding multiple, specific data demands by investors based on their stewardship or investment priorities.

Datamaran is a software analytics platform that identifies and monitors ESG and other external risks through regulatory, media and other sources. The platform tracks 400 specific ESG topics for senior leaders hoping to avoid concerns on greenwashing in sustainability programs, says Marjella Lecourt-Alma, CEO of Datamaran.

Datamaran Launches Software Built for Executives that Enables Corporate Leaders to Gain a Clear View of External and ESG Risks

Award-winning technology company Datamaran today launched its latest innovation: Datamaran for Executives, the only automated solution available to take ownership of external risks and opportunities. Using cutting-edge, patented technology, Datamaran identifies and monitors over 400 external risk factors - including environmental, social and corporate governance (ESG), innovation and technology, and geopolitical issues - on an ongoing basis by scanning the regulatory, media and corporate disclosure environments. 

Datamaran for Executives empowers corporate leaders to drive organizational success in the complex modern world. It helps the C-suite integrate these increasing risks and opportunities into strategy and decision-making. Already applied by companies like American Electric Power (AEP), BBVA, BMO, Cisco, and Philips.

Materiality isn’t just completing a formal project, it’s a live exercise

Interview with Neil Jones, Senior CSR Manager at Walgreens Boots Alliance:

"Datamaran’s patented technology enabled us to engage our stakeholders through a survey, helping define the material topics relevant to them. It helped us to identify the landscape of almost 100 topics that could be relevant. It is also enabling us to have an ongoing, dynamic process, as we are using continuously its horizon scanning capabilities in the US and UK, and are monitoring on a quarterly basis the topics that are increasing or decreasing in importance. This is in line with our approach to listen to our external stakeholders on a continual basis, as critical friends, having those dialogues all year round. Materiality for us isn’t just completing a formal project, it’s a live exercise."

There is no Planet B: The Growing Importance of ESG

According to leading scientists, the human race has about one decade left to mount a global movement to transition the world economy to a zero-carbon emission system. Whilst the UK Government has pledged to slash emissions by 78% by 2035,  it will require a global effort from every nation to if not reverse the human-induced global warming, at least slow it down.

“ESG is also now accepted as central to legal, corporate and financial risk assessment. A principal reason is that there has been an explosion of related regulation at national, supranational, and international levels. Growth is estimated at over 100 per cent between 2015 and 2018, according to Datamaran.”

Data on demand: 9 ESG trends from GreenFin 21

In 2021, our world is driven by data. As the push for ESG measurement and disclosure grows, this truism is extending into the space as never before.

From radical innovations in tech to systems change and social impact, several key ideas are emerging to make sense of collecting, managing and reporting ESG data. Below are the top trends, as identified by speakers at GreenBiz Group’s GreenFin 21.

"AI’s job is to curate, organize, normalize, make comparable, but yet it is not going to make any decision," echoed Susanne Katus, vice president of brand and business development at Datamaran, an analytics platform monitoring ESG risk. "Give this to the end user, allow them to decide what matters to their decision making process."

AI and ESG: It's about accountability

More than 90 percent of S&P 500 firms publish environmental, social and governance reports, and more than 600 rating agencies analyze the results. Despite mountains of research, the findings remain mixed on whether ESG goals produce superior returns. 

"Even just a few years ago, we saw that corporate leaders really didn’t have access to useful risk information on ESG," Susanne Katus said during a panel discussion at GreenFin 21. Katus is vice president of brand and business development at Datamaran, which works with Fortune 500 companies to provide board oversight, monitor risk-management processes and determine the impact of various sustainability factors on financial performance. 

Companies such as Idaciti, Datamaran and TruValue Labs are harnessing AI in an effort to optimize ESG analysis. Their emphasis on algorithms and machines are meant to reduce the inherent biases of human analysts which can often tilt corporate reports in unanticipated directions.

Taking Ownership of ESG: All Eyes on Disclosure

Marjella Lecourt-AlmaRead shares her thoughts in this article on Nasdaq:

Corporate leaders today face the key challenge of proving that they take seriously a wider scope of risks and opportunities, including environmental, social and corporate governance (ESG). We see this playing out now in the 2021 proxy season, with a growing number of companies responding to shareholder proposals focused on ESG.

Shareholders want to know more about how companies impact and take into consideration the wider ecosystem in which they operate, and they want that information presented in a clear and consistent way – with data to back it up.

This intensified focus on ESG is also reflected in policy. With the Biden Administration in power and Gary Gensler confirmed as Chair of the SEC, there is a rising emphasis on transparency - and the underlying processes to achieve that - to meet these growing expectations.

DLA Piper partners with Datamaran to integrate ESG due diligence

Powered by patented technology, Datamaran is a cloud-based Software-as-a-Service (SaaS) platform that provides a data-driven process for identifying and monitoring external ESG risks and opportunities. Datamaran enables evidence-based insights and a near real-time assessment of material ESG risks that can be tailored to a client’s sector, geography or stakeholder context. 

Combined with DLA Piper’s extensive ESG subject matter experience and multi-jurisdictional and cross-sector expertise, this solution offers clients a unique opportunity to embed ESG due diligence and risk management across corporate, financing and transactional activities.

Interview with Susanne Katus, VP of Brand & Business Development at Datamaran

What role does technology play in risk management and what investments risk management experts should be thinking about at this time?

"[Technology] is a new type of insurance policy to ensure essentially that you haven't missed anything in the wider external risk landscape, that there are no blind spots that may have been there before," says Datamaran's VP of Brand and Business Development, Susanne Katus to Risk Management Show host, Boris Agranovich.

Regulators want firms to own up to climate risks

America's main financial regulator is taking an interest in climate change—and wants everyone to know. The Securities and Exchange Commission (SEC) has created a task-force to examine environmental, social and governance (ESG) issues, appointed a climate tsar and said it will “enhance its focus” on climate-related disclosures for listed firms. It looks poised to introduce, among other things, rules forcing firms to reveal how climate change or efforts to fight it may affect their business. Since September regulators in Britain, New Zealand and Switzerland have said they plan to make such climate-related disclosures mandatory. So, too, have stock exchanges in Hong Kong, London and South Korea. The EU may follow suit.

‘ESG tech’ is helping companies achieve data-driven sustainability reporting

Redefining materiality (again) to transform the role of business in society

ACCA and Datamaran agree MOU

A memorandum of understanding (MOU) has been signed between ACCA (the Association of Chartered Certified Accountants) and Datamaran, the only software analytics platform in the world that identifies and monitors external risks, including Environmental, Social, and Corporate Governance (ESG).

The purpose of the agreement will be to:

• work together on key projects including research reports, policy activities and events
• share joint insights with ACCA members, future members and other ACCA stakeholders
• use Datamaran’s patented technology and data-driven insights to inform relevant online learning activities for ACCA members and future members to support their training and development.

Report: Companies Should Examine Whether Their Financial Disclosures Adequately Acknowledge Systemic Risks

Datamaran is the first “ESG-tech” company in the world to secure a patent on unstructured data analysis

New research muddles case to ESG outperformance

The EU and other European institutions have issued or updated 343 requirements and recommendations focused on climate change risks and management since 2011, data from Datamaran show, compared with only 53 initiatives in the US.

ESG data – mind the gaps

Datamaran's approach avoids the problems faced by other ESG data providers, such as boundary definition, gaps in indicators and consistency of reporting.

“For instance, we assess whether a company is reporting on the risks posed to it by climate change or whether it is adequately addressing biodiversity in its services,” Ian van der Vlugt, VP of Product & Research at Datamaran, says.

He adds that this approach can help to filter out meaningless or misleading corporate verbiage.

The US is slipping behind Europe in Corporate Diversity

US boardrooms fail to reflect country’s demographics

Investors watch for double standards on Black Lives Matter

"The US is lagging behind the rest of the world on corporate diversity and inclusion disclosure based on a new analysis of financial reporting, by risk analytics company Datamaran. The company used a natural language processing algorithm to gauge how companies are prioritising the issue."

Second European lab project Task Force appointed

The Steering Group of the European Corporate Reporting Lab @EFRAG (European Lab) has appointed the members of the Project Task Force for the project on reporting of non-financial risks and opportunities and linkage to the business model. The appointed members have expertise on reporting of non-financial information as preparers of different sizes in a number of sectors, financial institutions (banks and insurers), users (institutional investors and rating agencies), the accountancy profession, not-for-profit organisations with a role in standard setting and good practice identification for corporate reporting, academia and other stakeholders.

The end of the "Greta's effect": less environment and more health in company financial disclosure

COVID-19: Datamaran redeploys AI engine to spot corporate activities and regulatory change

Datamaran - the only digital solution for external risk management  - releases an update on EU and US companies' disclosure on the COVID-19 outbreak. This is part of a monitoring application that uses AI technology to capture decision-useful insights from corporate filings, regulatory developments and news media worldwide.

ACCA forges the path for social and environmental value creation and calls for collective action by business, finance professionals and society

In a new report Social and environmental value creation ACCA calls for more concerted action to deal with the challenges of social and environmental value creation. The report has been developed with CFA Institute and is supported with insights from Datamaran.

The report examines the role of business in environmental, social and governance (ESG) issues which are under increasing focus from investors and society more widely. It assesses the current state of corporate disclosures on key social and environmental issues in different regions around the world and outlines five disclosure and decision-making approaches that can support business to create inclusive and sustainable value for society over the long-term.

Financial services catching up on climate change disclosure

Boeing, Nissan and Volkswagen could have seen it coming

ERM’s Data-driven Materiality Assessment powered by Datamaran

Companies now have access to a comprehensive, data-driven materiality analysis process with ongoing analytics and advisory services, thanks to an exciting global partnership that brings together Datamaran’s proprietary AI technology and ERM’s advisory services in an exclusive ESG materiality offering.

Business resilience is high on the list of challenging issues for companies. In their new global partnership, Datamaran – a unique software platform for identifying and monitoring material ESG topics and ERM – a leading global provider of sustainability advisory services – will provide the most powerful materiality analysis on the market. This will give companies the most real-time and comprehensive understanding of their material ESG topics, leading to a more effective data-driven corporate strategy and, ultimately, business success.

Datamaran Joins Over 50 Banks in Endorsing the UNEP FI Principles For Responsible Banking

Datamaran launches a user certification program

The purpose of the program is to empower Datamaran customers to achieve high proficiency in using and applying Datamaran 4 to various internal use cases. The ultimate goal is to help customers to take a full ownership of benchmarking, materiality analysis, and issues monitoring processes in-house.

A six-week program that comes complimentary to all customers helps users achieve proficiency at their own pace. Followed by an exam, the program provides with a collection of interactive lectures, audio-visual materials, coursework, as well as custom analysis template.

Regulators are taking a tougher stance on ESG disclosure a new study reveals

Data analytic tools help financial institutions understand how sustainability drives firms’ market value

Company culture has traditionally has been hard for investors to systematically assess. Culture Capital takes a data-driven approach to identifying companies with strong culture and investing in them.

The company uses ESG data to assess culture. It relies on Datamaran, a platform that analyzes ESG sources such as corporate reports and online news. Datamaran screens these sources for references to relevant cultural elements such as transparency, employee retention, and community engagement.

Marjella Alma joins ACCA’s Global Forum for Sustainability

Datamaran’s external risk management patents have been published

Datamaran - the global leader in Software as a Service (SaaS) solutions for external risk management - has announced today that three of its patent applications have been published with their approval pending. Through its technology, Datamaran enables a systematic and thorough monitoring and analysis of Environmental Social Governance (ESG) risks.

The three patents Datamaran has applied for in 2016 have now been published and are available on the World Intellectual Property Organisation website - the United Nations’ agency that oversees and promotes the protection of intellectual property. The patents support the company software’s backbone as they cover its business intelligence, regulatory and data processing methods and systems. As a result of years of collaboration between the
leading ESG and risk management experts as well as data scientists and technology professionals, these inventions protect Datamaran’s proprietary technology.

Datamaran names former Moleskine executive Marco Ariello Chairman of the Board

Marco Ariello, previously Chair of the iconic notebook company Moleskine, was named Chairman of Datamaran Ltd., a London-based technology business that provides unique software solutions for non-financial risk management.

Marco Ariello’s appointment comes after Datamaran, which also has offices in Spain and the US, closed its Series-A financing round and is focusing on large-scale distribution of its AI platform. Marco has a proven track record in building globally recognized brands and scaling businesses, as well as a wealth of experience in private equity.

Datamaran closes successful $4.5 million Series A investment round

Datamaran, a provider of cutting-edge solutions for non-financial risk management, recently closed its Series A investment round. The funds raised will be invested to help accelerate growth in North America and Europe. Datamaran will focus on fully automated applications; taking manual services and applying AI to build faster and better applications. Datamaran aims to monetize the opportunities that surround data usage by 3rd parties.

“A shift has happened. New business issues like climate risk and diversity are critical, they are increasingly regulated and an essential part of comprehensive business risk management. Datamaran helps business meet this need. We are thrilled to close this successful Series A fundraise through the valued support of Keystone, West Hill, and our long-standing investor base. The financing enables us to boost our growth, innovate and broaden our Saas product suite" – CEO & Co-founder of Datamaran, Marjella Lecourt-Alma

Welcome to Datamaran 4: The Materiality Revolution is Here

Datamaran 4 makes possible the first ever fully automated materiality analysis. 

Datamaran is a powerful solution for tracking Environmental, Social and Governance (ESG) issues critical to a business. Datamaran fully automates previously manual processes undertaken by sustainability professionals for benchmarking, materiality analysis and ESG risk identification saving time, money and delivering better insights.

Materiality analysis is a process used in the majority of companies, in which the non-financial issues that are most significant for a company in terms of risks and opportunities are identified, making them critical elements for decision making, reporting and strategy setting.

Need business intelligence on sustainability issues? Big data analytics have solutions to guide your strategy

Data & Technology - Mitigating Emerging Issues & Delivering Value Creation

Andrew Bird, the MD of Crowe Horwath Risk Consulting UK and Marjella Alma, the CEO of Datamaran explain Emerging Issues and how a dramatic business response and game changing technology solution can create value.

Marjella Alma - Keynote

The challenge for companies is to convey non-financial data as if they were financial with the aim of building trust and brand reputation among stakeholders. Learn how leading companies are quantifying and reporting their environmental and social economics.

Datamaran launched new version of its AI-powered platform to monitor ESG risks and opportunities

On October 16, Datamaran launched the third version of its platform, which leverages real-time big data to identify and monitor ESG risks and derive decision-useful insights from public sources.

Now, more than ever, companies need to understand and manage new risks in order to remain resilient. Recent regulatory developments, such as the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures, literally catapult the topic of climate change onto the desks of CFOs, risk officers and boards.

How will you ensure that your business is still around by 2020?

Datamaran is a women-led data analytics firm, co-founded by Marjella Alma, former Director at GRI. Their solution - a data analytics platform called  Datamaran - is new, disruptive and was built with the market.

It offers narrative screening of corporate filings, regulations and (social) media sources,  helping investors and corporates monitor emerging regulatory, competitive, and reputational risks with a focus on ESG issues. 

"Datamaran is... probably the most efficient tool to achieve an in-depth understanding of corporate reporting ever built. The regulatory radar in particular has the potential to disrupt classical financial analysis across many sectors and asset classes.”

Data analytic technology: the new game changer

Marjella Alma is founder and CEO of eRevalue Ltd., a women-led technology company with offices in London and NYC. eRevalue offers Datamaran™, an emerging issues management system that delivers real-time analytics on new forms of regulatory, reputational and competitive risk and opportunity. A former Director of Global Reporting Initiative (GRI) – providers of the world’s leading standard for non-financial reporting – Marjella has had a front row seat in the corporate strategy space for over eight years, working directly with Fortune 500 companies across the globe. She knows that technology will be a game changer in business innovation.