Value Exchange to Unlock Data Collection

One of the most common pain points we hear from our client base: the complex and often inefficient process of data collection. ESG practitioners and investors face a considerable challenge in gathering and managing data from varied internal and external sources to effectively evaluate sustainability efforts and risks. This issue not only impacts the timeliness and accuracy of reports but also strains resources within organizations, particularly those dedicated to ESG initiatives.

At the heart of this issue is the traditional approach to data collection, which has largely remained extractive, one-sided, and often leaves data providers with little insight into how their contributions impact the broader ESG narrative.

The Problem of Data Collection in ESG Practices

The traditional method of data collection in ESG contexts typically involves practitioners engaging with numerous data owners across various departments and business units. These practitioners often find themselves in a frustrating cycle of requesting, reminding, and waiting for data, which is often delivered late, incomplete, or in formats that are difficult to aggregate and analyse. This not only delays reporting but also diminishes the confidence in the accuracy and relevance of the data collected. Moreover, the process is frequently manual, relying on outdated tools like emailed Excel spreadsheets, which only exacerbate the inefficiencies.

The problem extends beyond internal data collection within organizations. In the broader investment value chain, particularly for institutional investors managing diversified portfolios, the challenge is even more pronounced. Public market data is relatively accessible due to disclosure requirements, but private market data remains elusive. Investors often face significant barriers in obtaining consistent, reliable data from private entities, which hinders their ability to make informed decisions and fulfil their fiduciary responsibilities.

The underlying issue here is the lack of a value exchange in the data collection process. Data owners, whether they are internal employees or external partners, are often inundated with requests for information but receive little to no feedback on how their data contributes to the overall ESG objectives. This disconnect leads to a lack of motivation to provide high-quality data promptly, as the contributors do not see the immediate value of their efforts.

Unpacking the Dynamics: From Extraction to Engagement

A paradigm shift from an extractive to a participatory approach in data collection could significantly enhance the efficiency and effectiveness of ESG practices. Drawing parallels from organizational development, where engaging employees in storytelling and narrative-sharing significantly increases participation and data richness, ESG practitioners can apply similar methodologies. By transforming data collection from a mundane task into an engaging, value-exchanging process, organizations can unlock new levels of cooperation and quality in data provision.

The Value Exchange Model

The concept of “value exchange” in data collection is straightforward yet transformative. This model proposes that as soon as data is submitted, the contributors receive something of value in return—ideally in real-time. For instance, when a business unit or portfolio company submits its data, they could instantly receive a snapshot report that provides a preliminary analysis of their ESG performance. This report could highlight how their activities align with broader sustainability goals, such as the United Nations’ Sustainable Development Goals (SDGs), and offer insights into their ESG footprint.

Implementing this value exchange model has several potential benefits. Firstly, it fosters a more participatory culture within the organization, where data providers feel more engaged and valued. Secondly, it improves the efficiency of data collection by incentivizing timely and accurate submissions. Thirdly, it enhances the overall quality of the data collected, as contributors are more likely to invest effort into providing precise and comprehensive information when they see immediate benefits.

At Unifi, we have found that integrating this value exchange into our data models and platforms significantly improves data collection processes. By providing system-generated, bespoke reports immediately upon data submission, we help businesses not only track their ESG performance internally but also communicate their contributions to stakeholders more effectively. This approach transforms data from a mere compliance exercise into a valuable asset that drives strategic decision-making and stakeholder engagement.

For ESG practitioners and investors, the message is clear: to unlock the full potential of data collection, we must move beyond extractive methods and adopt a value exchange paradigm. By doing so, we can create a more efficient, transparent, and collaborative environment that not only meets regulatory and reporting requirements but also enhances the overall impact of ESG initiatives.

About Unifi

At Unifi, we recognize the immense pressure ESG practitioners face and are committed to providing the support they need as they shape sustainable futures, profitably. Our experience with customers and partners across EMEA has shown us that practitioners often feel like they are “drowning” in their responsibilities. By offering tailored solutions, practical tools, and dedicated support, we aim to alleviate these pressures and empower practitioners to excel in their roles. If you are curious, please visit unifi.works to check out the shape of your sustainability initiatives.