Building a Carbon & ESG management SaaS - Episode 2: Data Platform

Building a Carbon & ESG management SaaS - Episode 2: Data Platform

As committed companies align their climate and business strategies, the use of carbon and ESG impact data becomes both increasingly sensitive and essential to enable a controlled transition to new low-impact business models. To best equip these companies, Traace has been designed and developed as a true "Data Platform", with the specificities linked to impact data, but also all the requirements of modern Data Platforms.

Patrick Nollet

Patrick Nollet

Co-founder

31/1/2024

What is a Data Platform?‍

Data Platforms have emerged with the democratization of data usage and the exponential increase in the amount of data generated and processed by companies. Good use of data, whatever the field, has become a strategic advantage. 

Data Platforms enable data to be manipulated throughout its entire lifecycle, and respond to all the issues raised by the fine-tuned use of sensitive data in a competitive business context:

  • Where is the source data? 
  • How do you collect it efficiently? 
  • Where to centralize the data collected? 
  • What data processing should be applied to it to obtain the result or useful information?
  • How to visualize data for analysis?
  • How can we ensure the reliability of data (completeness, accuracy, etc.) in order to make the right decisions or carry out public reporting? 
  • How do you collaborate on a data set?
  • etc.  
ESG Data platform - ESG Data Lifecycle

Why do companies today need real Data Platforms to process carbon and ESG data?

Numerous Data Platforms managing a certain type of data have emerged to meet data processing needs that companies previously covered by combining Excel files with multiple tabs and endless mail loops to collect raw data and collaborate on these Excel files to manipulate and exploit this raw data.

As each of these needs becomes a strategic issue for the company (customer data management, inventory management, project management, etc.) the "Excel + Mail Loops" duo reaches its limits and starts to become a hindrance to good data exploitation: Partial data, calculation errors, high costs of maintaining files and macros, difficulties in historizing data, impossible data security and analysis, etc.

This is exactly what is currently happening with the management of carbon and ESG emissions data. Up until now, most companies have relied on Excel to calculate their carbon footprint or aggregate and manage their ESG data, before eventually reformatting this data for publication in an annual report.

At Traace, for example, we regularly integrate for our new customers the carbon footprint measurements they have carried out in previous years using Excel. When compared with the first measurement we carry out with the platform, we very often find significant calculation errors in the imported Excel files, requiring us to go back over the history of the carbon balancesⓇ in order to enable a usable analysis of the evolution of the carbon measurements. These errors are more often due to data entry or manipulation errors in the Excel files than to errors in the carbon accounting methodology.

This is why the market in which Traace operates, that of SaaS platforms for managing Carbon and ESG data, was born. Today, more and more companies are looking to equip themselves with a solution enabling them to manage their impact data in an advanced way. A solution that is necessarily user-friendly, so as to enable all the company's stakeholders to collaborate, and in particular operational staff who are not experts in climate issues.

A need for software tools reinforced by the entry into force of the CSRD

Beyond simple footprint measurement, mature companies have understood that modeling and piloting decarbonization trajectories by entity, and deploying transition action plans within their organization that enable these trajectories to be maintained, is simply impossible without a suitable tool.

Today, the urgent need for companies to really reduce the carbon emissions of their activities, on the one hand, and the regulatory pressure on them to produce advanced extra-financial reporting on the other, particularly with the entry into force of the CSRD, makes the exclusive use of Excel and collaboration between teams solely by e-mail extremely risky for companies.

Indeed, CSRD is an ESG data management subject, and the difficulty of CSRD lies not so much in the number of boxes to be filled in as in the questions asked and the data required to answer them.

The CSRD imposes an unprecedented level of transparency and control over ESG data, particularly with regard to the environment: 

  • A complete and detailed carbon footprint measurement with comparison to the reference year and justification of variations if the scope of calculation has been modified. - ESRS 1 & E1
  • Requirement to provide justified uncertainty calculations for each data item reported. - ESRS 1 & 2 BP-2
  • Detailed impact reduction targets and trajectories. - ESRS 2 MDR-T
  • A transition action plan with quantified impact, linked to maintaining trajectories and achieving objectives. - ESRS 2 MDR-A
  • A financing plan for transition actions (CapEx, OpEx, etc.). - ESRS 2 MDR-A

All these factors, plus the need to generate future CSRD reporting files in XBRL format (digital taxonomy), make the use of an ESG platform virtually indispensable.

Responding to the CSRD by relying solely on Excel or historical ESG reporting tools would expose the company to non-compliance, significant additional costs and would create a competitive disadvantage by initiating a technical debt with regard to the management of its transition plan:

  • Partial and imprecise data collection
  • Inability to report on impact reduction trajectories
  • Inability to report on action and transition plans and their financing
  • Substantial expenditure on human resources, both internal and external consulting.
  • Non-capitalization of Year 1 efforts for subsequent years.
  • Disengagement and exhaustion of reporting teams
  • Inability to report on progress of impact reduction efforts

The CSRD marks the end of traditional, partial and à la carte extra-financial reporting, imposing the need for modern ESG management and reinforcing the need for adapted Carbon and ESG Data Platforms .

CSRD main Requirements - ESRS

How did Traace design and build its Carbon and ESG Data Platform?

The Traace platform is designed as a nerve center for all the data needed to analyze and manage climate and ESG strategies. Traace's objective is to make impact data usable to build and deploy effective transition plans, and facilitate our customers' transition to concrete action.

The Traace platform is both :

  • a central repository for all ESG & Carbon data - Data Repository: data is reliable, exhaustive, accessible, exportable, auditable throughout its lifecycle and, above all, secure.

  • a Processing Hub: raw data ingested into Traace can be manipulated, processed, converted, combined and filtered in an advanced way to generate the desired impact analyses or simulations, collaborate on datasets and easily produce customized reports at the desired granularity levels.
Traace carbon & ESG data platform - Collection, Processing, Use

Key points of the Traace Data Platform :

  • Its flexibility
    Since its creation, Traace has relied on a flexible data model. Our data model is specially designed to make our platform adaptable, customizable, easy to integrate and, above all, scalable. In particular, it enables our technical team to release new features at a fast pace, so as to respond rapidly to our customers' changing needs.
  • Its scalability
    An efficient Data Platform adapts to the volume of data its users collect. Traace is highly scalable, collecting and processing millions of data points.

  • Its collaborative dimension
    Data governance model: modelling operations + fine-grained role management, enables true data governance to be put in place to ensure data quality and exploitation.

  • Its
    Traace securityis SOC 2 Type II and ISO 27001 certified, RGPD compliant with data only hosted in Europe. Our customers' data is strictly isolated from each other in a single shared infrastructure. What's more, its robustness is regularly tested through penetration and Business Continuity Planning (BCP) testing.

  • In/Out connectivity
    Traace's data ingestion technical layer is designed to ensure exhaustive, reliable, collaborative and automated collection of raw ESG and activity data.
    Thanks to multi-format data ingestion on the one hand (input into the interface, API, file upload, specific questionnaires set up in the tool and sent to stakeholders, etc.) and via automatic processing of the raw data on the other (collaborative workflows validating source data quality, automated conversions and calculations, automatic grouping of data by category and grid, etc.), Traace is able to offer a wide range of services. ) and via automatic processing of raw data (collaborative workflows to validate source data quality, automated conversion and calculation rules, automatic grouping of data by category and analysis grid, etc.).
Traace Carbon and ESG data platform layers

‍Conviction- The limits of the Data-First approach to ESG issues

The measurement of a company's environmental footprint and ESG impact is based on sensitive business and operational data : industrial processes, value and supply chains, internal organization, investments and purchasing, etc. In fact, "Carbon and ESG Data" is clearly strategic for companies today, and in order to manage its impact and transition, it can be tempting to seek absolute exhaustiveness in its collection and management.

Infact, "Carbon and ESG Data" is clearly strategic for companies today, and in order to manage its impact and transition, it can be tempting to seek absolute exhaustiveness in its data collection and management, in particular by seeking to "APIize" or "automate" everything.

Unless in the near future global and complex value chains, with multiple suppliers and customer outlets, are fully connected and offer reliable and available data at every moment, wanting to "API everything" for its impact data collection is purely utopian and does not correspond to a pragmatic reality of the necessary transition of organizations.‍

At Traace, we automate what can be automated, we connect what can be connected, but we don't make false promises to our customers. Our approach is realistic and pragmatic, with a single objective: to enable our customers to take real action and accelerate the reduction of their negative impacts.

Decarbonization and, more broadly, the transition to low-impact business models are long-term processes. Processes that require regular (at least annual) iterations on the collection, measurement, analysis and simulation of ESG and carbon data. The quality of the data thus takes precedence over its quantity, enriched by methodological expertise and a critical eye to enable, once again, informed and rapid decision-making to deploy its transition on the ground.

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