Is It Time to Bring Technology Into Your Climate Risk Discussions?

The scramble to meet intensifying investor expectations has led to a war on ESG talent. Yet few companies are giving enough thought to the role of technology in their climate  journeys. Many may see investing in climate risk management technology as something for a later date, but this is a mistake.

Companies at all stages of their climate journeys should look to integrate technology into their climate workflows, as well as harness the power of automation and data-driven evaluations. Technology can help to quickly assess disclosure alignment, benchmark progress against industry peers, give data-backed credibility to climate assessments and strategies, and free up valuable time and resources for more high value activities.

This article explores the role of technology in corporate climate risk management and how investing in the right tools can rapidly accelerate your organization’s climate maturity.

Analyze alignment instantly, benchmark rapidly and continuously

Companies have traditionally relied on in-house experts or external consultants to assess alignment with climate reporting frameworks and standards, as well as to benchmark against their industry and best practice examples. But both of these approaches require manual research and data management. They can also quickly become time-consuming and expensive.

Technology offers a cheaper, faster, and more thorough option for companies on their climate journeys. It can analyze disclosure alignment in weeks — rather than months — and benchmark against competitors and best practice examples. It also provides a more thorough analysis by collecting and assessing more data points than manual labor does.

Not only are assessments and benchmarking exercises more thorough when conducted with technology — by amending individual data points, they can also stay easily up to date when frameworks and regulations change, without the need to repeat the entire exercise manually. In this way, technology can dramatically improve climate risk management and scale internal climate competence.

Develop credible, data-driven assessments and strategies

Human analyses can only include a finite amount of data since the processing of every data point requires additional human hours. The alternative is to purchase benchmarking data from third-party organizations, but these datasets can come with six-figure price tags, preventing all but the largest of companies from capitalizing on the available insights. While there is a time-based and monetary limit to the amount of data sources that human experts can collate and analyze, there is virtually no limit to the data that technology can manage.

And when it comes to climate risk management, data can make or break a strategy. C-suite and board leaders need compelling reasons to buy into climate-driven initiatives, and getting the right data can be an exercise in persuasion. Consistent, data-backed communications give leaders confidence in the strategies and action plans proposed to them, as well as push them to take action.

Free up time and resources for high value work

Despite intensifying investor and regulatory pressures, most organizations — even large ones — devote only a small percentage of company resources toward ESG — and an even smaller percentage to climate. Most ESG and sustainability teams are small and under-resourced, and many don’t have climate-specific resources — despite climate being the biggest and most high-profile risk (and opportunity) within ESG.

Despite the reality that sustainability professionals are strapped for time and dealing with limited budgets, much of their efforts are often spent doing time-consuming and manual tasks. Firstly, many ESG professionals spend hours every day keeping up with the slew of changing regulatory reporting requirements and market trends that may influence material risk factors. Secondly, climate leaders often spend significant amounts of time conducting manual research and evaluations, and there are typically too few junior team members to delegate these responsibilities to. Finally, ESG teams often manually keep tabs on competitors’ and industry leaders’ climate activities, a time-consuming exercise that’s often maintained loosely in spreadsheets and internal memos. With all of this on their plate, there’s not much time left for forward-looking, strategic planning and implementation.

As an honorary member of your company’s ESG, sustainability, or climate team, your technology investment can dramatically change the daily working lives of your team and free them up for much higher value work. AI and automation can curate relevant news and keep teams up to date with trends, insights, and regulatory updates in just a few minutes. It can transform disclosure assessments and benchmarking exercises from months-long processes to just two weeks. And, it can closely monitor competitors and industry leaders to ensure your team is up to date on what’s happening in your sector.

With more time and resources, your team can focus on crafting compelling climate narratives to present both to board stakeholders, investors, and the public, develop strategies and action plans to move the needle on climate.

Technology offers a critical headstart for climate assessments and disclosures

While most companies are focused on securing the best sustainability ESG talent, the real opportunity lies in harnessing technology to make climate assessments and disclosure faster, cheaper, and more detailed. Companies that seek out the right technology partners will get a significant headstart over their peers and competitors. With climate-specific technology, becoming a climate leader is inevitable.