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In India’s Fragmented ESG Space, Businesses Need Expert Advice: Rinesh Patel

Snowflake, the US-headquartered cloud data platform, has emerged as a binding glue in the fragmented data ecosystem of environmental, social and governance (ESG) frameworks. In today’s business landscape, ESG considerations are gaining prominence, as companies strive to align their operations with sustainable practices and meet evolving stakeholder expectations. Rinesh Patel, global head of financial services at Snowflake, talks about how important it is for modern corporations to navigate the complex web of scattered ESG frameworks using tech tools which are customised to honour the investor and regulator’s expectations. Edited excerpts:

Tell us about Snowflake.

Snowflake is a data platform built in the cloud to help customers get access to data, manage that data and distribute it to help solve the internal data challenges and processes that help their organisations function in a data-driven economy.

Since ESG reporting is a hot topic, how do you see Snowflake carving out a niche?

Whether the customer is a typical bank or an asset manager, its ESG priorities are evolving. With this evolution, a series of requirements are emerging today and for the future. However, as one delves into sector-specific frameworks, like in the case of ESG strategy, it is really a fragmented landscape in terms of technology, commercial models and regulations. Firms are looking at the ESG issue strategically and wanting a tactical response to supporting different use cases across different frameworks that exist across the fragmented ESG landscape. At Snowflake, we are really enabling firms to take a strategic approach to identify, acquire and join diverse ESG data sets into business processes.

Your business model includes structuring ESG data to meet regulatory needs. In India, it is said that ESG reporting structures are not developed. How do you prepare clients for it?

ESG obligations are becoming more mature. As a result of this evolution in ESG frameworks, we see a shift from global frameworks to sector-specific frameworks, like Task Force on Climate-Related Financial Disclosures and other regionally led frameworks. We are monitoring these standards. We have noticed that these frameworks are significantly broadening the ESG data needs for customers. Snowflake and its customers are able to effortlessly integrate, combine and analyse all of these varied data sources from these frameworks into the ESG transformation requirements as these frameworks expand.

Many corporations are concerned that ESG reporting is an added cost to them. How does Snowflake allay their fears?

Financial services customers are on a journey to be more data-driven in their decision-making. We see them make investments in the cloud and consider using modern data technologies, because they are changing internally. Be they data scientists, quants, analysts or compliance experts, they all now have wide-ranging questions around data. If a customer is looking for a data-rich, faster and more personalised service, an ESG framework as a visual use case that supports data transformation as an additional factor—like ethics in environment and social impacts—becomes more important to it.

How do third-party ESG data marketplaces work, and how can Indian companies benefit from them?

ESG is still a relatively new concept, and, as a consequence of that, there are no standard ESG metrics or ESG datasets that exist today. This means that a diverse set of ESG vendors have emerged. Data vendors, be they public, private or government bodies, are all presenting their own data sets, methodologies and metrics, which means that hundreds of different data types exist that create a fragmented landscape to undertake meaningful analysis.

When you combine this with the fact that organisations still have silo technology legacy architectures, it means that ingesting and provisioning this type of data to support business and reporting needs is costly and time consuming.

Through Snowflake’s data cloud, and more specifically, our marketplace and data sharing capabilities, customers can seamlessly access hundreds of ESG data sets in a query-ready format. This enables them to strategically and seamlessly identify, acquire and integrate provisions into their business processes. This means that the time to source, analyse, ingest and actually use that data stands reduced, and their ability to solve problems becomes faster.

How evolved is the ESG ecosystem in India?

The ecosystem in India is consistent with the conversations we are having in other areas. Retail or institutional investors are equally surrounded and concerned by carbon emissions scandals, unethical supply chains, leadership challenges and a lack of diversity in management roles, which is an important topic from an investor perspective. They want these ESG metrics to now be included in the investment process, and we take it more seriously in how the risk is managed within the portfolios.

And then, economically, India has sectors that are highly interdependent. With the impacts of climate change, like monsoons and heat waves, taking effect, putting in place solutions today to help those sectors transition and mitigate risk becomes vitally important.