Battle For ESG Data Business Models Hots Up As BCG Launches Sustainability Platform With Eni

Battle For ESG Data Business Models Hots Up As BCG Launches Sustainability Platform With Eni

The world’s largest management consulting firms continue to zoom in on the ESG and sustainability market opportunity. Hoping to reap big rewards over the next decade as firms invest in the energy transition, BCG has teamed up with European energy group Eni and with Google to launch a sustainability data platform dubbed “Open-es”. The pre-announcement of the platform which still appears to be on the drawing board indicates the urgency with which BCG and Eni wanted to raise their profile in the ESG and sustainability market. The Open-es platform functionality will include sustainability benchmarks and statistics; supply chain mapping tied into circular economy principles; integration interfaces for ESG investors and corporations; and collaboration tools.

The BCG/Eni concept for Open-es is not new. DNV GL launched their Veracity platform in 2017 which is focused on asset management and operational efficiency for the energy and maritime sectors. They now claim 18,000 firms have used the Veracity platform for data sharing and app development as well as a total of 180,000 users. In February 2020, BCG’s competitor Bain became a minority shareholder in EcoVadis a fast-growing sustainable supply chain and risk management data hub. With more than 600 employees, EcoVadis has grown rapidly in the last five years and offers what has become de facto standards for sustainable supply chain ratings based on ESG scorecards. They have 65,000 firms on their sustainable supply chain platform. Apple co-founder Steve Wozniak has backed the recently-launched EFFORCE venture – a platform to securitize and trade energy efficiency using blockchain tokens.

Sustainability data businesses have sprung up to fix market failures – a lack of regulations forcing firms to cost in environmental and social externalities. Market forces are causing firms to move faster than government regulations dictate on sustainability workstreams such as GHG emissions reduction, ethics policies for suppliers and reliance on fossil fuels. Will these sustainable data platforms get rolled over by game-changing regulations? Unlikely. Verdantix expects to see slow progress in international efforts such as the IFRS consultation to standardize sustainable data definitions, taxonomies and reporting requirements. What’s more, investors will want far more ESG data than firms will be required to disclose by regulations. This leaves a lot of oxygen in the market for entrepreneurial tech and data ventures. Ultimately, mass market investment in baseline ESG and sustainability information management, risk reduction and performance improvement will require much heavier regulatory pressure and ESG reporting standards backed by the accounting profession. But that scenario is unlikely to come to fruition until 2024.