Last February, Wolters Kluwer created a separate ESG-focused division within its global software solutions and services business.
The Corporate Performance and ESG (CP and ESG) division brought together four existing software units to offer the company’s global banking clients integrated financial, operational, and ESG performance management and reporting solutions.
Presided over by Karen Abramson, former chief executive of the company’s tax and accounting division, the new business unit comprised Wolters Kluwer’s corporate performance division called CCH Tagetik, and which includes US corporate tax; its Enablon environmental health and safety/operational risk management software; its TeamMate internal audit solutions (TeamMate); and, finance, risk and reporting.
ESG Insight caught up with Abramson to gauge how the project is progressing and what Wolters Kluwer has learned from in its first year of operations.
“The reality is we are working in a fast-growing and evolving market – of course there are challenges,” she explains.
ESGi: Wolters Kluwer launched its Corporate Performance and ESG division a year ago. What was the intention of the consolidation and what operational changes did you have to make?
Abramson: As the regulatory environment has evolved for ESG, so has the demand for ESG-focused company data from stakeholders and shareholders. There is an increasing expectation that the collection, analysis and disclosure of this data will be subject to the same rigor and scrutiny as more traditional financial data.
In addition to compliance with regulatory bodies, we know our customers have a compelling need to derive insights from their sustainability data. Companies are seeking the technology to collect, report, analyse and assure data to provide insights to inform their ESG strategy. This demand continues to increase as companies are also seeing the opportunity to leverage sustainability as a growth driver and a competitive advantage.
We realised Wolters Kluwer had business assets that were in a unique position to be able to help corporate clients collect, report, analyse and assure their ESG data.
How does CP and ESG work on an operational level – are the constituent units working well together?
We have four strong core business units that will continue to drive growth and bring innovation to our customers. We have identified operational, market, customer and product synergies within these businesses and the respective technologies.
Each business unit shares a joint focus on enabling C-suite leaders to drive strategic business transformation, performance and reporting through digital innovation. Bringing together these four business units enables integration when it makes sense, and exponential new opportunities.
The four business units and technology teams collaborate and work together to develop innovative new solutions for our clients and deliver business growth. We created strategic genomes for each business, identifying new opportunities and focus areas where we could strengthen our client offering through greater partnership across the new division.
We are already seeing the results of bringing together these business units into a new division. All four divisions have seen an uplift in their NPS scores, demonstrating the impact of the integrated and enhanced client offering.
We have also received positive, third-party validation, from independent research firms, that our division is addressing client pain points, with impactful results. Verdantix, for one, recently recognised Wolters Kluwer CP & ESG as having the strongest market momentum among all ESG vendors in its prestigious Green Quadrant report.
Did you have to re-engineer your enterprise data and technology strategies to accommodate the change? If so, how did you achieve that?
We brought together a leadership team that could align our product, partner, and back-office technology organisations and their strategies.
The focus here is driving efficiency and innovation through aligning how we collaborate and interact internally and with clients and partners. I would characterise this as strategic alignment of technology approaches, building on and amplifying existing collaboration.
We are also leveraging the divisional technology capabilities to innovate and expand the use of artificial intelligence (AI) in our solutions. We currently leverage AI technologies to enable and support predictive analytics and planning and continue to invest in generative AI focused on data analytics and data visualization.
This innovation is supported by our wider corporate focus with approximately 50 per cent of Wolters Kluwer’s digital revenues now coming from products that leverage AI.
Can you elaborate on any synergies that came out of this arrangement – for you and for your clients – and what lessons have you learned from unanticipated challenges?
The challenge is to move with speed and urgency on new, integrated ESG solutions while continuing to drive growth in the four core businesses. In the first year, we invested time in creating the operational efficiencies, including sales compensation alignment; aligning Salesforce access; identifying common clients and integrating technologies into wider product offerings.
The reality is we are working in a fast-growing and evolving market, of course there are challenges. But while our division is new, our company is not and we are experienced in adapting and innovating in response to changing client needs.
Looking back on our first year, we can see the impact of the synergies. Product development is a key area of collaboration and we launched an integrated solution across our Enablon and CCH Tagetik platforms, and are supporting the deployment of our products across business units.
Another recent example of product innovation is the addition of ESG standards, tailored to support internal audit workflow and practices, to our cloud-based TeamMate+ global audit expert solution portfolio.
Have you been able to offer new products and services from the consolidation, and if so can you elaborate on them?
Our strategic product roadmap is enabling us to collaborate and innovate across the breadth of CP & ESG.
One compelling example is the delivery of integrated products like Enablon ESG Excellence. The product enables the collection and connection of operational and ESG data from various enterprise applications, from source to disclosure, in a single solution that supports all ESG-related functions across the enterprise. It also provides auditable, investor-grade pre-configured reports, presentations and dashboards that automatically update when data changes at the source, ensuring timely, accurate ESG+ sustainability information.
This product was built in partnership between two of our business units. It integrates the ESG data collection and analysis expertise in Enablon and the corporate reporting and the disclosure capabilities in CCH Tagetik.
How have financial institution clients benefited from CP & ESG ?
Wolters Kluwer CP & ESG division supports financial institutions in two key areas. One direct and one indirect.
Let’s take the direct benefit first. With increased regulatory and stakeholder demand for the banking sector to provide critical disclosures and analysis related to ESG and climate, we have employed our long-term experience of financial risk and regulatory reporting to support banks in navigating the evolving ESG landscape and requirements.
OneSumX for ESG and Climate Risk Management provides a solution that enables banks to create an effective ESG strategy. This product enables financial institutions to collect, control, centralise, and consolidate all their environmental, social and governance data on a single platform. It provides a holistic approach to ESG – from ESG data management, climate risk impact assessment to EBA ESG disclosures reporting.
Next, we can unpack the indirect benefit. If we look at climate alone, we know that more than US$57 trillion of assets under management are committed to net zero by 2050, with investors under pressure to set interim targets and provide reports on progress.
To provide this data, investors need high quality, validated ESG data and analysis from their portfolio companies. Through innovating to provide end-to-end ESG solutions like ESG Excellence, the Wolters Kluwer CP & ESG division enables businesses to deliver high quality ESG disclosures to their investor shareholders.
What new ESG challenges have you seen emerge in your first year and how are you preparing clients to meet them?
The evolving ESG landscape is bringing new challenges and opportunities for every sector. The fragmented approach to regulation across geographies is one of the most discussed issues when we speak with our clients who operate internationally.
There are over 600 ESG reporting standards globally and our CCH Tagetik solution supports clients to report on ESG and sustainability performance according to the EU taxonomy, the Corporate Sustainability Reporting Directive (CSRD), IFRS S1 and S2, as well as having the capability to be extended to support other emerging requirements based on customer needs.
Let’s focus in on CSRD which is one of the most pressing topics for many of our clients. Clients are seeking support with the introduction of a host of qualitative and quantitative disclosure requirements, mandatory sustainability reporting standards, XHTML formatting, a digital taxonomy, and an obligatory audit. And many clients are looking for support with the requirement to include double materiality in reporting.
In response to this, we’ve extended CCH Tagetik ESG & Sustainability Performance Management with CSRD-specific capabilities to fully support businesses in navigating this complex new ESG regulation. This solution offers a range of features designed to automate the reporting process and ensure accurate disclosures while equipping businesses to determine material matters and evaluate their impacts.
CSRD will evolve — and our solution will evolve accordingly. We continuously update all our solutions to reflect the latest regulatory requirements.
And this point really encapsulates the purpose of Wolters Kluwer CP & ESG: we recognise the evolving landscape, anticipate client needs and innovate to deliver high-quality solutions to support businesses to navigate the complexities ahead.
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