Impact of ESG

Rise of the CDO

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ESG data significantly expands the bank's existing data spectrum

As a result of increasing regulatory demands and rising stakeholder requirements, traditional bank data is being expanded to include important ESG aspects (environment, social and governance). This affects existing financial, portfolio and risk data as well as data relating to the bank's own operations. This data differs considerably in nature from traditional data due to its broad spectrum. Currently, this data is obtained from both internal and external sources; the data is not yet standardised and is subject to constant further development in terms of regulations and reporting obligations. The necessary integration of this data, some of which is new, into the existing data landscape is a major challenge for banks. By using an established approach for ESG data management, the CDO is able to master the flood of ESG data and thus recognise that ESG data is a part of their area of responsibility.

The CDO can also use ESG to become anchored more deeply in the issue of data procurement and to expand their own product range and scope

Due to the complex challenges posed by ESG data, the CDO's understanding of their role is also evolving. This is because it is no longer relevant to solely map existing bank data and provide it in high quality, but also to procure new types of ESG data that are not currently available in the bank's systems and in some cases also represent a transfer task for customers. This "new" data not only needs to be integrated into and harmonised within the existing data architecture and data procurement, it also needs to be made available to the key recipients within the bank. Given the large number of options available for ESG data procurement, it is essential to identify the right sustainability data and its procurement channels within the data ecosystem and to make the sustainability data available to the right recipients within the bank using a procurement strategy that is geared to the bank. It is precisely this task that the CDO is already best able to tackle using the existing skills and expertise in the area of data management; the CDO is also able to continuously develop their range of responsibilities and role in relation to the ESG components.

The use of new technologies empowers the CDO in their role as owner of ESG data

The collection of new types of ESG data and their integration into existing structures require innovative approaches. The CDO therefore has the opportunity to optimise their role in the area of ESG data by using innovative technologies in cloud and IT solutions. These new technologies include, for instance, the use of artificial intelligence to secure the extraction of sustainability data from public sources. The use of cloud platforms also enables the consolidation of sustainability data from various sources, creating the possibility of data provision and data analysis in real time. ESG data can thus be procured more efficiently and processed in the essential processes within the bank. In this way the bank is ideally equipped to integrate this data into its decision-making and management processes.

The current role of the CDO clearly shows that they can play a central role in the ESG transformation in banks. This means it is all the more important for the CDO to get involved in sustainability issues and the associated strategic decisions at an early stage. In this way the CDO can strengthen their role and effectively integrate ESG data into their area of responsibility. This approach will enable banks to optimally prepare for their own sustainability transformation and successfully manage the increasing demands for transparency and sustainability.

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