eRevalue BLOG

With the end of the year approaching, my colleagues asked me to reflect on the last 6 months, which, in short, have been quite the ride. I may have moved to a completely new city but “life in London” thus far has involved more explorations of new technologies and books on building a lean and mean start-up than explorations of the city’s cobblestone streets and Shakespeare’s sonnets.

Why? Because I’m on board Datamaran™, “coding in the garage” with the eRevalue team. 

I feel incredibly lucky to work each day with a highly capable team of coders, data scientists, and analysts who continually prove that, for the most part, the generally accepted assumptions about environmental, social, and corporate governance (ESG) trends in business are in fact just assumptions. I agree wholeheartedly with The New Yorker in saying that technologists are the new rockstars.

With technology, we’re capturing critical data that goes beyond the numbers. “Behind the scenes,” our strategic business intelligence software Datamaran™ interacts continually with the narrative of corporate reports, corporate websites, regulatory databases, traditional media, and social media. It “sniffs out” the key topics and concepts disclosed by companies, referenced in regulations,  and discussed amongst stakeholders; and, in doing so, reveals patterns that reinforce how competitive companies today go beyond the mere bottom line.

Today, I’d like to zoom in on what I have learned about how we apply this technology to deliver digestible data and, by doing so, enable data-driven decision-making on today’s key risks and opportunities by corporate leaders across industries.

After several months of proto-typing and fine-tuning Datamaran™ with our Piloteers (multinational companies, advisory firms, and industry experts), I recognize that technology in the ESG landscape represents a sea-change, even more than I had anticipated one year ago when I had first cultivated the idea behind Datamaran™ during a conversation with our Chairman Helle Bank Jorgensen.

The time for technology is now, as evidenced by the recently launched technology initiatives by the leading non-financial reporting standard setters International Integrated Reporting Council (IIRC), Global Reporting Initiative (GRI), CDP, and Sustainability Accounting Standards Board (SASB). It is highly encouraging that these non-financial reporting forerunners are increasingly reinforcing the important role of technology in enabling change and innovation in business; and how innovation is increasingly seen as the answer for companies to remain competitive, a key theme of the recent Financial Times Innovate America event we attended in New York City alongside Google, Microsoft, IBM, and others.

So how exactly is eRevalue capturing meaningful data with Datamaran™? Let me start by explaining some basic principles underlying our conceptual thinking in terms of technology.

1. Making Data Digestible: Smart data derived from large data sets (big data analytics) can drive more objective data-driven decision-making. In addition, as this article in WSJ Online explains, data can help strengthen linkages between different parts of the business to make more efficient use of their different resources and assets.

2. “Reverse XBRL”: Narrative information (or unstructured data) is largely un-captured and yet central to ESG disclosure given the prominence of qualitative information. Natural Language Processing (NLP) techniques can capture this narrative information, make it machine-readable, and reveal previously unrecognized patterns. That way the data is market-driven, dynamic, and demonstrates new developments as they arise.

3. Issue Identification: Analysing narrative by applying NLP help business continually spot new risks and opportunities in a dynamic, near real-time, and forward-lookiong way. NLP goes beyond the numbers to highlight the “why” behind certain issues as well as the relationships between company activity, regulations, and stakeholder opinions around these issues.

4. Continuous Materiality: Consistently monitoring risks and opportunities empowers businesses to be resilient and competitive by accelerating their efficiency in being both responsive to and “ahead of” market developments. The opportunities for predictive analysis are already evident.

5. Cross-divisional Communication: An online collaborative environment where senior decision-makers have access to digestible data will foster a 21st century approach to risk and compliance. According to Forbes online a ‘greater emphasis on the organizational dimension of risk management, and how human interact with and respond to risk, will always yield benefit.’

To put ‘purpose into practice’ – quoting our Piloteers at Radley Yeldar – we then apply these key principles to analysing the following three landscapes:

• The competitive landscape – focus on publicly available corporate sources and the issues therein.
• The regulatory landscape – focus on regulatory and voluntary initiatives and the issues therein.
• The stakeholder landscape – focus on internal knowledge harvesting and external (social media) monitoring.

So, which issues??

• Anything that makes up the “new normal” in business and is being disclosed by companies themselves, referenced in regulations, and discussed by stakeholders – i.e. market-driven, evidence-based issues.
• Non-financial issues (environmental, social, corporate governance, economic) that are at the top of the corporate and regulatory agenda: e.g. diversity in management, percentage of women on boards, emissions, energy-efficiency, waste management, executive pay, employee training, talent attraction and retention, and more.
• Mega trends and new non-financial issues that are popping up in the “new normal” corporate landscape: e.g. circular economy, shared value creation, integrated governance etc.

These issues may pose competitive, regulatory, and/or reputational risks or opportunities for companies across different industries and within different markets and jurisdictions. Datamaran™ accelerates a company’s journey to insight to help them determine this in a time efficient, cost effective, and forward-looking way.

To a large degree the rise of the “New Normal” can be attributed to the pioneering efforts of non-financial standard-setters. Increasingly, the voluntary frameworks of these initiatives are referenced in national laws and regulations, in listing requirements of stock exchanges and by companies towards their respective value chains. Also here, technology will start to play a major role – to help companies advance their disclose  practices when using these different standards and frameworks.

We look forward to contributing to these discussions, exploring the big data lakes, and riding the waves of innovation going forward!

Please contact me to learn more about our pilot and upcoming restricted release of the first version of Datamaran™.