CSO Lise Alm on solving the ESG challenges in the Alternative Insight podcast

Worldfavor’s Chief Strategy Officer Lise Alm was recently invited as a guest in an episode of the podcast Alternative Insight by Aztec Group. Together with the host James Gow, Chief Client Officer at Aztec, and Maria Liby-Troein, Associate Partner at Bain & Company, Lise sat down to attempt to solve the ESG data challenges in private markets. They covered the challenges managers face in ESG data in providing ESG data to investors and regulators, the difficulty of ESG benchmarking due to the lack of standardization, and the effects of regulations on ESG data collection and distribution. 

Here are some highlights of the podcast episode:

• Over the years, there has been an explosive growth of interest and demand for ESG data, driven by increased regulations, legislation, and stakeholder demands. What’s great about this is that the global flow of capital is directed toward the sustainable investment landscape. 

• Providing the required ESG data is still a work in progress and heavily depends on a company’s sustainability work. Investors are aware of the administrative burden of ESG reporting, and they don’t want to burden their portfolio companies. This affects the kind of data they get and that’s why investors need to help their portfolio companies understand the importance of ESG data in the first place.

• Regulations are a double-edged sword. They are helpful because they force ESG data to be available. At the same time, they cause confusion and the emergence of more regulations, standards and frameworks which add more complexity. 

• There is pressure to be transparent and to disclose – benchmark data is really important, but hard to get in place when there are so many different regulations asking different questions.

• Software for providing ESG data is essential. The number of ESG metrics that need to be looked at and the complexity of tracking them make it nearly impossible in the long-term to manage ESG data without a digital tool or platform.

Listen to the full episode here: