‘It’s Time’ for Data and ESG to Lead the Way: A Q&A With Satish Weber
The need for businesses to act on climate change has never been more urgent. The recently concluded NY Climate Week 2024 emphasized this urgency, bringing together global leaders to discuss the most pressing challenges of our time.
With the EU’s Corporate Sustainability Reporting Directive (CSRD) set to impact 50,000 companies by 2028 and California's new regulations demanding climate disclosures, organizations have an urgent need to get ready. European companies must submit their first CSRD report by 2025, while U.S. businesses in California face emissions and climate risk disclosures by 2026.
A key takeaway shared by many attending this conference was clear: Time is of the essence, and these mandates are simply more than compliance. They are a turning point for the future of business.
After leading a dynamic panel discussion at Climate Week NYC, where the theme this year was fittingly 'It's Time,' Satish Weber, Global Head of Sustainability for Financial Services at Capgemini, discusses how the financial sector must reimagine their business models, while making a real difference for enterprises and society.
1. You spoke about how financial services institutions carry a larger onus of advancing sustainability action than any other industry. What do you believe makes the business case for sustainability in this sector so compelling?
Financial services play a critical role in driving sustainability by influencing where investments and insurance coverage go. By choosing which companies and sectors to support, they push industries toward greener practices. Their biggest impact comes from scope 3 emissions, the environmental footprint of the businesses they finance. This is where they have the most power and responsibility to lead the shift toward a sustainable economy.
It is no longer enough for financial services to view sustainability as just a regulatory requirement. It is now a business imperative.
Two-in-three financial services executives now see sustainable practices as a path to growth, not just a regulatory box to tick. More than ever, consumers are voting with their wallets based on how businesses behave, giving firms that embrace ESG principles a competitive edge.
But here's the issue: despite all the talk, only one in four firms is planning to significantly ramp up their ESG investments soon. This gap between awareness and action could lead to accusations of greenwashing, eroding the trust of increasingly savvy consumers, poor customer experience and ultimately loss of business.
The reality is, 69% of consumers believe businesses should communicate more about their sustainability efforts. This sentiment is even stronger among younger generations, with 75% of Gen Z and 74% of millennials wanting to hear more about ESG progress. While "greenhushing" may seem like a cautious approach, it represents an opportunity for leaders to share their sustainability stories and build recognition.
2. We continue to hear how data remains a hurdle. Why is it a big cause for concern and what can the industry do to overcome this challenge?
Data fragmentation has made it tremendously challenging to gain an accurate view of a company’s sustainability efforts.
First, unreliable or incomplete data obscures the true impact of sustainability initiatives, which can lead to accusations of greenwashing. In an era where transparency is paramount, the inability to accurately track emissions or other environmental metrics raises red flags. Additionally, fragmented data across multiple systems makes it difficult for financial institutions to get a holistic view of their ESG performance, creating blind spots in both strategy and compliance.
Beyond reputational risk, there’s a regulatory angle. With frameworks like the EU’s Corporate Sustainability Reporting Directive (CSRD) setting higher standards for disclosure, poor data quality exposes firms to legal liabilities. Banks and financial institutions that fail to provide accurate, timely ESG data may not only face fines but also lose investor confidence, which is increasingly tied to sustainability performance.
The solution lies in investing in technology and automation. Automating emissions data collection reduces errors and boosts accuracy. Tools like data cockpits offer real-time ESG insights, aligning goals with measurable outcomes.
However, it is not just about tech. Industry collaboration is crucial too. By developing common standards, financial institutions can move beyond fragmented reporting and build the trust regulators and consumer demand.
3. Lastly, what collective actions can the industry take to accelerate growth through sustainability?
As regulatory pressures and stakeholder expectations ramp up, financial services firms must take a structured approach to sustainability. This means committing to action and establishing ongoing monitoring processes.
Executives can outline key steps and use tools like data readiness assessments to streamline compliance and reporting. According to our research, only 11% of organizations have invested in data management tools, so there’s a significant opportunity here.
To combat greenwashing and build trust, financial services companies need to adopt a new approach that leverages both structured and unstructured data, comparing ESG pledges to actual actions and progress. For example, our ESG Lens solution, powered by AI and natural language processing, enables organizations to deliver reliable ESG insights from unstructured data while ensuring complete transparency by detecting data irregularities and bridging gaps in third-party ESG scores.
With tools like Business for Planet Modeling, we are helping enterprises develop and stress-test sustainable business models using a digital-twin approach, while our Sustainability Data Hub provides a robust foundation for ESG intelligence, driving data-driven decisions across all enterprise functions.
Ultimately, transforming sustainability reporting empowers firms to embrace innovative technologies, creating meaningful impact in their operations and beyond.