Societe Generale has emerged as a significant player in the realm of environmental, social, and governance (ESG) data and technology. Yannick Ouaknine, the head of sustainability research at Societe Generale’s Bernstein Group, has highlighted the positive implications of the increasing number of ESG-data providers. This trend signifies a widespread recognition of the critical role that ESG metrics play in investment decision-making.
While the proliferation of ESG-data providers is a promising development, it also presents challenges for ESG businesses within banks. Societe Generale, for instance, invested 1,800 hours in analysing various data sets provided by vendors related to companies’ Scope 1, 2, and 3 emissions during a recent project. This extensive undertaking underscored the importance of identifying the most suitable providers for different countries and industries. Furthermore, it emphasized the necessity for banks like Societe Generale to supplement existing models with their own insights, even when powered by artificial intelligence for carbon reporting.
Yannick Ouaknine explained that initiatives such as the Science Based Targets Initiative (SBTI) rely on linear projections of future emissions based on historical trends. Consequently, data providers may recommend specific reduction targets for companies to achieve net-zero carbon goals. However, Ouaknine emphasized the imperative for banks to incorporate their own intelligence into these models, recognizing the possible inadequacy of a one-size-fits-all approach.
Societe Generale’s dedication to ESG data and technology underscores the significance of integrating environmental, social, and governance factors into the decision-making processes of financial institutions. With the evolving landscape of ESG data providers, it is vital for banks to not only select the most suitable providers for their specific requirements but also to enrich these data sets with their own expertise. This approach ensures a more holistic and customized evaluation of ESG metrics, ultimately benefiting both the banks and the companies they serve.
In conclusion, Societe Generale’s leadership in embracing and leveraging ESG data and technology establishes a benchmark for financial institutions globally. By acknowledging the importance of integrating ESG factors into their operations, Societe Generale showcases a commitment to responsible and sustainable investment practices. As the global emphasis on ESG continues to intensify, the role of banks in effectively harnessing ESG data and technology will undoubtedly become even more pivotal.