It's time to consider your overarching business IT strategy to support ESG

The World Investment Report, published by the UN Conference on Trade and Development in June, estimates the value of sustainability-themed investment products at $3.2 trillion last year — up more than 80 per cent from 2019. There is a growing belief that sustainable business is better business.

On 3 November 2021, the IFRS (International Financial Reporting Standards) Foundation Trustees announced on their website “the creation of a new standard-setting board- the International Sustainability Standards Board (ISSB)- to help meet the accelerating demand for sustainability. The mission of the ISSB is to deliver a global baseline which will provide investors and other capital market participants with comprehensive information about sustainability related risks and opportunities”. With this in mind, it seems certain that the UK will implement its own ESG reporting standards in the near future.

As alternative investment enterprises continue to wrestle with these pressures, astute managers recognise interoperability between data, the cloud and cybersecurity. Properly framed, the infrastructure question should be about how a manager can drive business growth. Answering this question accurately results in enterprise success, greater efficiency and productivity, reduced cost, and better risk mitigation. If data, cloud, and cybersecurity are seen as an organic whole rather than as separate challenges a firm is able to build a scalable and flexible business IT solution. This improvement is vital, as stakeholders, investors and regulators demand more immediate action from companies to address environmental, social and governance issues. Ultimately, firms will need to be prepared to take action and evidence they are taking to make changes, so they are able to support investor and due diligence requirements.

There are some elements that we can manage really successfully though and in fact future proof, and that is the tech we use to help us with our day to day business flow. We have been streamlining data solutions for some time. Most firms have now centralised their data management, which underscores the importance of understanding of data. They have also decentralised their cyber security – an evolution which requires careful attention. The focus around decentralised cyber security shows no signs of abating. External bad actors are becoming more professional, more focussed and have access to market leading tech. A strong technical, process and people based programme can prevent attack. AI and machine learning tools can support a strong cyber governance programme. Centralised data dashboards, often built as a client specific platform, can allow managers to access their ESG data all in one place and get a 360-degree view of their data landscape. The ability to research, view and review investor and regulatory reports in this way provides managers with next level information to assist with investment decision making. Now is about how to marry up all the infrastructure elements of a firm’s IT to create a whole and holistic solution where each element marries to the next.