ESG-fit together with platform technology

Interview

Dr. Schlein, sustainable business practices are becoming mandatory for companies and will determine their success in the future. What challenges and obligations do banks and companies in other sectors generally face with regard to sustainability?

Dr. Frank Schlein: The green transformation is being accelerated by the new rules and regulations. I assume that this transformation will have a lasting impact on both the economy and the financial industry. The use of ESG criteria is leading to a paradigm shift in which responsibility must be rethought. The future of companies is characterized by sustainability. For a long time, references to sustainability served to polish up the image that companies wanted to communicate to the outside world. Now, sustainability must be understood as an integral part of corporate strategy. The topic of sustainable management has arrived in the public eye. Sustainability has also become increasingly important at management level and decision-makers have recognized the urgency of the need for change.

In future, every company will have to live up to its sustainable and social responsibility. The World Economic Forum has already pointed out a dilemma when it comes to implementation, because only collective action can lead to success. How important is collective action in this context?

Schlein: It is very important to create the legal basis for ESG-compliant business practices. This will give the efforts the necessary seriousness and urgency. This is the only way to achieve a sustainable impact that actually brings us closer to the climate targets. A holistic approach is the key factor in implementation; we need to think collectively. One person alone cannot achieve much. At the moment, however, holistic thinking is still in short supply. In many places, individual solutions including the description of ESG-compliant processes are developed using their own questionnaires and methodology. As a result, the administrative workload for companies can multiply with the large number of contact points, making it costly and causing implementation to fail.

How can this problem be tackled? What meaningful contribution can the use of modern technology make?

Schlein: Maha Eltobgy, member of the Executive Committee of the World Economic Forum, put it in a nutshell in an article published on March 26, 2021. The expert emphasized that ESG is complicated, but that a jointly pursued simplification is possible. However, according to Maha Eltobgy, companies need useful tools to measure and communicate sustainable value creation along the way. We at the CRIF Group also share this collective approach. Based on this, we have developed a globally networked solution that has already been successfully introduced in several countries.

What ESG solution has the CRIF Group developed? Is the solution the answer to the challenges that sustainability poses for companies?

Schlein: The solution is based on a platform and makes it easy to evaluate companies in accordance with ESG criteria and make this information accessible. This PaaS approach - PaaS stands for Platform as a Service - is the solution for both target groups, financial institutions and companies in other sectors. Through the initial ESG evaluation online via our ESG platform, companies receive their ESG certificate, which can be retrieved for the mandatory request. This is largely carried out in automated processes and reduces the administrative effort on the part of companies to a one-off certification that is valid for all requests. In addition, an annual review and issue of the ESG certificate ensures that the information is up to date. As a neutral platform, CRIF connects the many inquiring institutions and companies with ESG-certified companies.

Your ESG platform seems to provide a simple answer to the previously complicated question of implementing the future ESG criteria. Can CRIF establish a new standard that is compliant with the rules and enables all stakeholders to operate sustainably and socially in the future?

Schlein: Yes. We set ourselves this high standard when developing our ESG platform. Technology is not an end in itself. We see ourselves as an enabler that can help shape the future. We are also authorized by our Group's own CRIF rating agency to certify companies in accordance with ESG regulations. This combination has led to the development of our ESG platform, which has already been successfully launched in parts of Europe. The launch in German-speaking countries will take place in fall 2021.