Context - ESG data in the market: a complex landscape to navigate
On the ESG data provider front, a wide variety of ESG ratings and data products have emerged in response to investor needs. These ESG offerings are constantly evolving to respond to new topics of interest (e.g. share of green activities, contribution to the UN Sustainable Development Goals) and emerging areas of attention (e.g., environmental, diversity and inclusion, and biodiversity). This rapid growth warrant strong monitoring and oversight, as ESG providers often claim having the best data quality and data coverage. In practice, these providers tend to use estimates and approximations to boost their coverage, which results in data quality issues and lack of trust from market participants. In addition, there is little clarity and alignment on definitions, including on what ratings or data products intend to measure.
On the client front, the 2021 BP2S ESG survey demonstrates that ESG data quality is still a top barrier for ESG integration for institutional investors (where 59% of respondents cite ESG data as a top two impediment to more effective ESG integration). Clients are struggling to navigate this complex ESG data landscape with low correlation between providers, lack of forward-looking data, different methodologies across asset classes, data quality issues, lack of transparency, etc.
On the regulatory front, the Board of the International Organization of Securities Commissions (IOSCO) has recently published a set of recommendations (see link here: recommendations) applicable to ESG Ratings and Data Product Providers. We anticipate that the EU will take the lead, but it will take years before concrete ESG data providers’ regulations are implemented and enforced. Notably, the European Commission’s proposal for the creation of a European Single Access Point (ESAP) would be a crucial step in addressing the limited availability and scattered nature of sustainability-related entity information at EU level, but the implementation is planned for the long term with a gradual launch of the ESAP between 2024 and 2026.
On the NGO front, several initiatives have been launched such as: OS-Climate, PACTA (from 2DII), or CDP. These NGOs aim to develop Open source tools and data sets that could be used as a public good for the market.
Context – ESG data within BNP Paribas
Key ESG use-cases in the bank requiring robust ESG data and support:
Meeting emerging ESG regulations, notably in the EU (taxonomy, SFDR, etc.).
Managing pro-actively and efficiently ESG risks. The lack of robust forward-looking climate data is a key impediment to protect ourselves from climate change risks.
Contributing to decarbonising the economy: ensuring implementation of corresponding sectorial policies
Financing a better economy: ensuring that a growing percentage of our portfolio is dedicated to financing a more sustainable economy and foster the bridge as well with institutional investors’ needs
Accompanying our clients, both corporates and institutional investors, in their alignment to SDGs, through better understanding, dialog, engagement, and with a full palette of Sustainable Finance products and services
ESG Data Providers & Systems: currently more than 20 ESG data providers are in use across the bank. BNP Paribas Group recently developed a new ESG Data platform to acquire and diffuse this ESG data efficiently across departments. This platform is already live with key ESG providers. A process of rationalization of the providers and contracts has started but further coordination is needed to align the views of the different departments on ESG data best practices.
Objectives of the “ESG Data Analyst” role
ESG data best practices:
Become part of the reference group in the bank on ESG data best practices.
Contribute to establishing a robust governance to mobilize the expertise on ESG data best practices, including its definition and diffusion across BNP Paribas departments.
Support BNP Paribas teams on a range of topics such as Support Product teams, Risk teams, Regulatory teams and Company Engagement with ESG data integration best practices, ESG relevant data sets for their usecases, minimum data requirements to comply with new regulation (EU SFDR/taxonomy), Client Development / Coverage teams to prepare client event where ESG data is a key point of discussion,…
Support Data Science & Quantitative teams on innovative AI powered ESG projects leveraging unstructured data, machine learning, etc.
ESG data quality framework and governance:
Contribute to the ESG data quality framework and governance, with the aim to run data quality controls and due diligence across providers implemented within the BNP Paribas Group ESG data internal platform (onboarding stage as well as on an ongoing basis).
Contribute to the review of ESG Data Providers across ESG themes
Contribute to the review of ESG data industry initiative sponsored by government, agencies and NGOs
Contribute to the review of the competition and associated ESG data usage
Communication / Training
Conduct awareness and education sessions internally regarding ESG data
Previous data or digital experience
Understanding and interest for ESG
Ability to think strategically and be hands-on at the same time