Matthew Sekol: ESG Data Readiness Drives Value For Financial Services Firms

The financial services sector is rapidly embracing ESG-driven innovation, with 78% of investors willing to pay higher fees for ESG-aligned funds, drawn by the promise of better returns. Among millennials and Gen Z, this figure rises to 85%, as these generations prioritize using investments to influence corporate environmental practices, even if it involves higher risks. However, firms face challenges in ensuring ESG data accuracy, with discrepancies potentially leading to stakeholder disconnects and compliance issues. To address this, robust data integration is crucial for meeting regulatory standards and achieving sustainability goals. Microsoft has emphasized a connected ESG data strategy, leveraging its internal ESG data estate to create external solutions that enhance speed-to-market, risk modeling, and product credibility. For instance, Dutch asset manager Robeco uses daily ESG data updates to ensure audit-ready transparency while maintaining a focus on returns. Key priorities for ESG data development include advanced data integration, analytics for sustainable investing, transition capital allocation, carbon credit tracking, and AI-driven risk modeling. Firms can advance their ESG readiness through standardized data gathering, modernization, AI-powered insights, and action plans to close data gaps. Microsoft supports these efforts with solutions like Microsoft Cloud for Sustainability and Microsoft Fabric, enabling organizations to move from siloed processes to integrated ESG management. Case studies, such as Moody’s and the London Stock Exchange Group, demonstrate how AI and cloud platforms can enhance client insights and ESG reporting efficiency. By adopting robust ESG data solutions, firms can align with sustainability goals, drive business value, and ensure long-term success Resources: https://esgnews.com/matthew-sekol-esg-data-readiness-drives-value-for-financial-services-firms/