Tresata Team 3R
May 31, 2021
To paraphrase new age philosopher DaBaby in his ditty ‘ROCKSTAR’ (with our own creative liberties), “Our planet isn’t a guitar to be played, but a clock.” This quote serves as a cautionary reminder that time is the most finite of resources, and if we don’t respect, value, and protect this planet we inhabit, it will run out for future generations of our (and all) species.
As science would tell us (and YES…we believe in science…what a concept), we’ve ‘hit the snooze button’ on this ticking time bomb one too many times.
2020, for as jarring and unwelcome as some of its related changes may have been, put a pause on the clock and reminded us what’s important. The pause brought planetary wellness, amongst many other heated (no pun intended) topics, rightfully into the spotlight. The corporate world’s response, while long overdue, was a welcome move, as was its stronger push to make real change.
A PLANET & ITS PEOPLE
The “Great Reset” of 2020 dramatically altered how corporate social responsibility is defined. Environmental, Social, and Corporate Governance (ESG) has expanded well beyond philanthropy and community contributions to encompass everything from a company’s carbon footprint to the diversity and development of human capital and the creation of long term, sustainable value.
This shift of focus to purpose versus profit puts companies front and center in this renewed fight for what truly matters to us all.
Unfortunately, as the saying goes – you get what you pay for – ESG behaviors are already leaving a lot to be desired – not just for the practitioners at the frontlines, but also the participants on the sidelines.
This frustration is only exacerbated as no other movement is more data driven, data powered, and data dependent. And this is one where the ability to compute & decide isn’t the issue – what, how, and when is.
In essence, companies today can barely even talk of positive outcomes when the the lack of standardization in rules, availability and relevance of data, and absence of usable tools to evaluate ESG “readiness” make it impractical for companies to effectively meet any of their spoken promises, much less actually make a tangible shift in long-term planetary, societal, and economic health.
This second decade of the 21st century has seen a major evolution in how corporations conduct themselves – socially, fiscally, environmentally – giving rise to a new trend in ensuring equality, diversity, integrity & balance to address everything from climate change to social injustices, while being more transparent than ever.
And of course, even governments and regulators are accelerating their efforts to ensure a level playing field when it comes to ensuring we adequately address the root cause of the problem and not just the symptoms.
THE WORLD IS FLAT
As a company, we at Tresata have been investing our algorithmic resources to offer not just more noise but a beacon – an approach to using data and analytics to guide, direct, and help implement corporate ESG mandates in a tangible way.
These range from investing for ESG, building products, services, and processes that maximize ESG impact, and last but not least, providing a platform that can be built on as ESG definitions and interpretations evolve.
As an example, our research has led us to believe that a company’s supply chain represents both the largest risk and potential opportunity, as changing the ways companies can fundamentally impact ESG and the World around us.
We believe that in a company’s buyer and supplier relationships lies the true ability to capture obvious and hidden ESG risk.
For instance, we use some publicly available data and feed it into sustAIn (our software suite for ESG) to illustrate how a corporate citizen might appear “good” and compliant with ESG mandates, but in actuality they have hidden risk within their network.
What you will notice is how a perfectly good market score around ESG for a corporation may not represent the complete picture around how ESG mandates are represented. We end with this story as nothing more than a reminder that, while we may have a long way to go to achieving our planetary ambitions (and we are not talking about colonizing Mars, we have not given up on our 3rd rock from the sun just yet), we still have ways to go to ensure we avoid mere proclamations of intent, but ensure we actually practice what we are preaching…given the fate of our collective world depends on it.
TRESATA sustAIn IN ACTION:
Figure 1 – A singular company, colored green to signify a good ESG rating. You can also see that it has received a AAA rating on the right sidebar
Figure 2 – The company’s expanded network shows that the entities in direct supplier/buyer relationships with Repsol have fairly high ESG ratings as well, as indicated by the green node colors. Light green indicating a potential link to further explore.
Figures 3 & 4 – As we keep Kevin Baconing this network we see Ineos – a chemical manufacturing company whose fracking activity earned them a low ESG score. This software exposes the rogue behavior existing in the supply chain multiple hops away from our focal entity.
*The supply chain relationships shown in the figures above are manufactured in order to present the features of tresata sustAIn. It does not claim to accurately depict a factual supply chain between the companies represented here.