At the close of Impact Month, which raised awareness of ESG challenges in the financial services space and culminated in the launch of the not-for-profit Apex Foundation, we sought the insight of an ESG expert on the deployment of technology for ESG goals.
In a Q&A with Yohan Hill Director of ESG and Responsible Investing at Adams Street Partners, Joshua Brunert, global head of ESG product development at Holtara, asked about the role technology can play across modern ESG processes – and how it needs to be deployed for maximum impact.
Why is technology important for achieving Adam Street Partners’ (“Adams Street”) ESG goals?
Adams Street uses technology across all its ESG processes to engage investments, report to investors and encourage positive change throughout its activities. Given the centrality of data and related analytics, technology is vital to all modern ESG processes – it enables data, and therefore knowledge, to transfer seamlessly from investee companies through to investors.
When used well, technology enables investors to punch above their weight when they have limited employee resources. Reducing the hours spent collecting and examining data means more time can be spent using it, for example, to encourage positive change.
Which ESG challenges can be solved by technology, and which can’t?
Technology can solve a range of ESG challenges such as access to data and time efficiency. It can also provide the ability to scale through both implementation (via actionable workflows instead of high-level policies) and analysis – with thousands of data points across hundreds of holdings at one’s fingertips. Technology can also provide auditable trails of ESG data.
But as for the ESG challenges that technology can’t solve? It cannot yet assure the veracity of data – you need human expertise – and while technology can inform decisions, it can’t make them. Vision and accountability are needed within a firm.
What does it take to implement ESG technology successfully?
Clear goals and objectives are needed regarding what one wants to achieve, and how technology can help achieve them, before seeing technology as a solution. When developing new technology solutions, it is best to have regular check-ins and milestones with the solutions provider, be it internal or external to the firm, to ensure there are no surprises and that objectives are on track.
What might the future of ESG, and technology look like?
Across the investment landscape, the goal must be to ensure a continual, seamless flow of granular ESG data at the underlying portfolio company level. This will help improve the quality and reliability of the data used by investors for ongoing monitoring, reporting and engagement purposes, and help drive continual improvement.
For more information on our ESG products and services:
