How AI is simplifying sustainability reporting in banking

In today's financial landscape, understanding and managing sustainability risks, particularly those related to climate change, is paramount. With financial institutions facing increasing regulatory pressures and growing costs associated with climate impacts, a significant hurdle remains: the efficient and reliable collection of sustainability data from the clients they serve.

Emissions data for financed clients is often unreported, misreported, inconsistent, or unverified, making accurate risk analysis challenging. Businesses often struggle to manage data requests in different formats from multiple financial institutions that are monitoring physical risk, financed emissions measurements, and other regulatory compliance metrics. Such a fragmented process makes it hard to collect and harmonize data efficiently, driving up costs and draining valuable time and resources. This places undue burden on clients to complete numerous, redundant questionnaires instead of focusing on advancing their sustainability goals and realizing business value.

This is where LEO, powered by ESG Book, steps in to help with a purpose-built analytics and reporting solution that simplifies disclosure processes.

Developed in partnership with Boston Consulting Group (BCG) and built with Google Cloud, LEO offers an intuitive interface, standardized formats, data interoperability, and secure access, enabling public and private companies to efficiently report data to multiple financial institutions for disclosure and regulatory purposes. Now, organizations can disclose their sustainability data once and share it continually with lenders. This harmonized approach reduces the reporting burden on clients while improving data quality and comparability for financial institutions.

An honest accounting of emissions

Today, financial institutions require granular, asset-level data for precise risk assessment and management, which can be costly and complex to obtain. LEO uses cloud and AI technology to address these challenges by providing standardized reporting templates that are interoperable with global standards and facilitating efficient data sharing between companies and financial institutions.

Organizations also benefit from AI pre-fill features and access to more than 200,000 disclosures to automatically populate templates with publicly available data, helping to reduce repetitive data entry and simplify reporting. With BCG-developed modules, based on its Climate and Sustainability Data Template, clients can generate the reports financial institutions need and easily adjust the level of detail based on their specific organization’s context and archetype.

“We're proud to support the launch of the LEO platform, which aims to provide more efficient tracking of sustainability disclosure", Caroline Haas, head of sustainable finance advisory at NatWest, said. "Our business customers are often searching for tools to help them capture their sustainability performance for regulatory reporting and risk management across their value chain. Given businesses’ focus on growth and value creation, alongside increasing external requests for sustainability credentials and progress, the LEO platform presents a promising option for more efficient sustainability reporting.”

Building on existing expertise

Google Cloud offered ESG Book unique capabilities to help bring LEO to life.

Many global financial institutions already entrust vast amounts of data to Google Cloud, offering a significant advantage by streamlining the integration of LEO into financial institutions’ current data ecosystems. Google Cloud provides robust, secure-by-design, and scalable infrastructure that delivers enterprise-level security, helping financial institutions meet their rigorous requirements for protecting commercially sensitive data. Features like private data sharing with strict data permissions and full access control ensure that confidential sustainability-related information remains protected.

In addition, Google Cloud's commitment to keeping data safe and responsible AI ensures LEO can provide capabilities to pre-fill data, ensure data quality, and offer deep coverage on climate risk with leading data and AI technologies, including products like BigQuery and Vertex AI. With Google Cloud, LEO can provide financial institutions with a trusted and secure environment, giving them the confidence to manage their critical sustainability risks — without compromising data confidentiality.

ESG Book LEO offers a vital solution to the urgent need for improved sustainability data collection in the financial services sector. By simplifying reporting, enhancing data quality, and ensuring robust security, LEO makes it easier to provide the data financial institutions need to better understand and manage climate-related risks, which in turn contributes to a more resilient and sustainable future.

You can try LEO for yourself by visiting ESG Book.