Informatica World 2024 | Levent Ergin | Informatica

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Levent Ergin

Global Chief ESG Sustainability Strategist & Global Head of ESG Strategic Alliance Partnerships

Informatica

How Informatica is revolutionizing ESG compliance and climate risk management using an intensive-data approach

Since extreme weather events have become catastrophic across the globe, environmental, social and governance compliance has become top of mind for enterprises. This is why an intensive-data approach is needed. With ESG becoming a board level topic based on the need to do good for the planet, Informatica Inc.’s Intelligent Data Management Cloud offers a holistic view of climate-linked risks using an intensive-data approach, according to Levent Ergin (pictured), global chief ESG sustainability strategist and global head of ESG strategic alliance partnerships at Informatica

play_circle_outline Unraveling the Complexities: Navigating Carbon Emissions and ESG Disclosures in the Global Supply Chain

play_circle_outline Corporate Sustainability Reporting Directive and SEC disclosures

play_circle_outline Enhancing ESG Sustainability: Harnessing Data Management, Consolidation, and Enrichment to Mitigate Climate Risks

play_circle_outline The Power of Geospatial Remote Sensing Data: Innovating Climate Risk Analysis and Business Resilience

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Levent Ergin | Informatica

Levent Ergin

Global Chief ESG Sustainability Strategist & Global Head of ESG Strategic Alliance Partnerships Informatica

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Rebecca Knight

>> Good afternoon, everyone, and welcome back to theCUBE's coverage of Informatica World. We are on our penultimate segment. I'm your host, Rebecca Knight, sitting alongside my co-host and analyst, Rob Strechay. Rob, for this segment, we're talking about really one of the favorite topics of theCUBE, which is ESG.

>> Yes. I think, again, we're continuing in that theme. We have our other co-host with us who's back for his third segment, which is great because I think Informatica really has invested in this and really sees that, irrespective of where you are in your politics, this is something we all need to take seriously especially with AI and data centers, power, water. It's one planet.

Rebecca Knight

>> AI is resource-intensive, that's for sure.

>> Yes, and it's one planet.

Rebecca Knight

>> Well, speaking of that, I'd like to welcome our next guest, Levent Ergin. He is the global chief ESG sustainability strategist and global head of the ESG strategic alliance partnerships at Informatica. Yeah, that is a long title.

>> You're right, Rob. You're right.

Levent Ergin

>> Yeah. Thank you, Rebecca. It's a long title, I was going to say.

Rebecca Knight

>> Welcome back, Levent.

Levent Ergin

>> Thank you.

Rebecca Knight

>> Thank you so much for coming on. We're talking in this segment about the implications of ClearGPT on ESG sustainability data management. Before we even go there, let's back up and really talk about why this is such an urgent issue for organizations right at this moment in time.

Levent Ergin

>> Yeah. Thank you. Thanks. Glad to be here for the third time. Thank you very much. Yeah. I mean, when we back up and take a look at where this all started with the Paris Agreement signed in 2015 by 191 nations, the goal was to limit global warming to one and a half degrees so that we avoid any harsh climate change. That was the goal. Unfortunately, we've already hit that point last year. What we are now seeing as a result is more and more extreme weather events. Certainly, when I reflect on my own life when I first heard about these topics, it used to sound like an ethereal topic that scientists spoke about and none of us could directly relate to it, but now I'm sure all of us can relate to it directly with heatwaves, hailstorms and some form of extreme weather events that are very close to our lives. What this has then translated into, which is really the sense of urgency here, is the G7 and the G20 regulators have made ESG disclosures mandatory. Now, again, a bit of a politicized topic, however, when we look at the World Economic Forum, they've put extreme weather events as the number one business risk in their global risks report for 2024, so, now, climate change is really a board level topic. It's a physical risk and it's real. With the SEC's disclosures due in January of next year certainly in the US and in Europe, Corporate Sustainability Reporting Directive going live again in January of next year, there's a huge sense of urgency. Companies need to get prepared. Ultimately, it's about doing the right thing and it's also about making sure that, as a business, you can take the right mitigating actions for things like climate risk....

Rebecca Knight

>> and you're abiding by the law of these new regulations coming down, too.

Levent Ergin

>> Exactly.

>> Yeah. I mean, we were talking about the fact that, and we talked about it a little bit yesterday, it's really about that risk aspect of it and being able to protect yourself and your company, but also do right for the planet and understand, because if you don't know what your risk is or where your hot topic areas are, you can't solve for it. To me, that's a data problem. I know we've been talking about it in the other two sessions. Understanding where that comes from and how that comes together would seem like, again, a reason why Informatica has doubled down in this area and had some product announcements in this area as well.

Levent Ergin

>> Yeah. Absolutely. Absolutely. We launched Intelligent Data Management for ESG sustainability last year at Informatica World. Amit announced that and, certainly, we've been adding more innovations to that. I'm definitely going to touch on some of those in this session. One of the interesting things that you made me reflect on right now is there's a concept of single materiality and double materiality, and now I want to simplify that and what that means. In the US, we are aligned to SASB, which is Sustainability Accounting Standards Board, which is around single materiality, meaning, what are the impacts of the environment, social governance, ESG such as climate risk on our business? However, in Europe, there's the concept of double materiality, which is what are the impacts of our company on the environment, the people and the planet? Now, for companies that are headquartered in the US that has legal entities in Europe, they need to do double materiality. This is where you need intensive data. When we look at Corporate Sustainability Reporting Directive, there is over 1,400 KPIs that you need to look at, and you need to do a materiality assessment to understand, based on the industry vertical you're in, which ones apply to you so that you can then report on those things. Yeah, this is very data intensive, and you need to be able to evidence everything you do with data to not only mitigate the risks of greenwashing, but to also have ESG audit-ready data for your ESG disclosures.

>> Yeah. I mean, I think, to me, and we were talking about this off-air, it's the fact that, I was not even joking, I was asked by a Global 50 company, "What is the most sustainable cloud to go put your stuff in and to do AI in?" I was sitting there and I'm like, "Well, that's interesting." I'm like, "I don't even know how to answer that question because sustainability varies so greatly." Cloud is just another data center. It's really an operating model that could be on-prem or in somebody else's data center. What are you seeing with how people are looking at normalizing, because the data is, and we were just talking about it with Deloitte about this, normalizing the data and trying to say, "Okay, I'm getting it from this supplier?" I'm getting it from this supplier, and maybe it doesn't have everything I need and I'm trying to work with that supplier to get all of that data and then I got to put it all into the same format to now satisfy the SEC or one of the governments or the EU or whoever I need to send these reports to. How is what you're doing and where the product set is going with ClearGPT and others that are really helping in that effort, I guess, you could say?

Levent Ergin

>> Great question. Let's double click into greenhouse gas emissions, which is really the E of ESG, the main topic there. If we double click into greenhouse gas emissions, to give a relevant example, just like you have accounting standards, you might have IFRS, US GAAP, you need to have carbon accounting standards. For that, we have the Greenhouse Gas Protocol. That's like your golden standard. To even double click into the Greenhouse Gas Protocol, you have, as you alluded in the previous session, your scope one, two and three scope, one being your direct operations and anything you burn and what comes out of pipes. Scope two is the indirect emissions such as purchased electricity, what did the grid produce in terms of carbon, and then scope three, which is the biggest challenge, which is your carbon emissions in your supply chain which makes up more than 80% of the carbon footprint for companies where they might be using a cloud provider, and they need to understand their carbon footprint of the cloud provider because it's in their scope three. At Informatica, what we've done is build a data model that aligns to the Greenhouse Gas Protocol so that we can do all the heavy lifting around collecting this data. Now, to be able to collect this data, you need to look at your purchasing activity which lives in your ERP systems. When we talk to a multinational, each line of business is using a different system, sometimes multiple versions of that. Maybe they'll have 20 versions of SAP in one line of business. In another one, they might be using Ariba. In another one, they might be using Coupa. In another one, they might be using Oracle. How do you go about understanding the purchasing data which lives in your materials master in all of your ERP systems, then consolidate that at a legal entity level and then at a group consolidated level? That's a massive data challenge. We have lots of connectors that can look at the data model at source, replicate it at the target, move it across and then start enriching that with all of the ESG data that you need. When we think about supply chains, most of our customers have got more than 20,000 suppliers in our supply chain. This is how we accelerate the risk assessment process by leveraging ESG rating agencies such as Dun & Bradstreet where they give us access to 80 million public and private company records so that we can rapidly pull that to a centralized place for our customers who can then leverage that data for their actual ESG disclosures.

>> Yeah. I think you just hit on something that a light bulb went off in my head. There's different verticals, and Informatica talks to different verticals. What are some of the challenges across different verticals, and how do you bring it home for them?

Levent Ergin

>> Yeah, so a great question, let's start with the financial services, which is the most regulated industry. They were the first ones to start because, when you want to create a positive wave of change, you do that with a financial system, right? It's the big dam. You get wholesale funding from your central bank's wholesale line of credit, then banks turn that into products and they give that to the market. The challenge for the financial system is what we call financed emissions, meaning, what is the carbon footprint of the different asset classes that they are financing? This is where companies need to be able to understand, let's say, if they've invested in a security, what is the carbon footprint of that security? That's where we have our security's Master Data Management, enrich that with carbon emissions data. Everything in the non-financial services sector, any industry vertical with a supply chain is facing this massive scope three challenge-

>> Yeah. Yeah, like CPG. Yeah....

Levent Ergin

>> manufacturing, retail, CPG, life sciences in sourcing the various ingredients of their treatments, and even healthcare with all of their different supply chain implications there. This is certainly a cross-industry challenge, but each of them have got what we call materiality factors or different areas of concentrated ESG risks.

Rebecca Knight

>> I wonder if you could talk a little bit about a few further innovations that Informatica is working on particularly as it relates to the real differences that you just described earlier in terms of North American regulations and European regulations and, frankly, really the differences in outlook of these two regions of the world in terms of how they think about the very real risks of climate risk in terms of "is it my business that I'm worried about" or "is it my business and its impact on the environment"?

Levent Ergin

>> Great question. If we reflect on the latest SEC ruling, it scaled back the requirements compared to Europe. In the US, it's now only scope one and two, but in Europe it's also scope three, which is the carbon emissions in the supply chain. Now, for a multinational that has legal entities in North America and Europe, they need to do the whole shebang. The latest innovations that we are enabling for our customers is the ability to be able to tap into geospatial remote sensing data where you can get real, live information from space about these climate risks that are developing. What that allows you to do is then see your risks on a T plus 30-day timeline, which is approaching very quickly, all the way out to 2050. What this enables companies to be able to do is, depending on the industry vertical, for example, insurance is one of the heaviest-hit sectors, we certainly had the capital stress testing reveal that, but, for every other industry vertical for supply chains, you could start to understand if one of your suppliers is going to be hit by a hurricane or some kind of a extreme weather event so that you can think about what alternate sourcing you're going to do. All of these types of things are essentially not going to only help with business resilience, but also unlock innovation, so using climate risks for innovating in their actual industries.

Rebecca Knight

>> Amazing. Amazing. Well, Levent, this has been so interesting and really a fascinating conversation. Thank you so much for returning to theCUBE to share your insights.

Levent Ergin

>> Thanks for having me.

Rebecca Knight

>> I'm Rebecca Knight for Rob Strechay. Stay tuned for one last segment of theCUBE's live coverage of Informatica World here at the Mandalay Bay Convention Center. You're watching theCUBE, the leader in enterprise tech news and analysis.

Levent Ergin | Informatica

search

Rebecca Knight

>> Good afternoon, everyone, and welcome back to theCUBE's coverage of Informatica World. We are on our penultimate segment. I'm your host, Rebecca Knight, sitting alongside my co-host and analyst, Rob Strechay. Rob, for this segment, we're talking about really one of the favorite topics of theCUBE, which is ESG.

>> Yes. I think, again, we're continuing in that theme. We have our other co-host with us who's back for his third segment, which is great because I think Informatica really has invested in this and really sees that, irrespective of where you are in your politics, this is something we all need to take seriously especially with AI and data centers, power, water. It's one planet.

Rebecca Knight

>> AI is resource-intensive, that's for sure.

>> Yes, and it's one planet.

Rebecca Knight

>> Well, speaking of that, I'd like to welcome our next guest, Levent Ergin. He is the global chief ESG sustainability strategist and global head of the ESG strategic alliance partnerships at Informatica. Yeah, that is a long title.

>> You're right, Rob. You're right.

Levent Ergin

>> Yeah. Thank you, Rebecca. It's a long title, I was going to say.

Rebecca Knight

>> Welcome back, Levent.

Levent Ergin

>> Thank you.

Rebecca Knight

>> Thank you so much for coming on. We're talking in this segment about the implications of ClearGPT on ESG sustainability data management. Before we even go there, let's back up and really talk about why this is such an urgent issue for organizations right at this moment in time.

Levent Ergin

>> Yeah. Thank you. Thanks. Glad to be here for the third time. Thank you very much. Yeah. I mean, when we back up and take a look at where this all started with the Paris Agreement signed in 2015 by 191 nations, the goal was to limit global warming to one and a half degrees so that we avoid any harsh climate change. That was the goal. Unfortunately, we've already hit that point last year. What we are now seeing as a result is more and more extreme weather events. Certainly, when I reflect on my own life when I first heard about these topics, it used to sound like an ethereal topic that scientists spoke about and none of us could directly relate to it, but now I'm sure all of us can relate to it directly with heatwaves, hailstorms and some form of extreme weather events that are very close to our lives. What this has then translated into, which is really the sense of urgency here, is the G7 and the G20 regulators have made ESG disclosures mandatory. Now, again, a bit of a politicized topic, however, when we look at the World Economic Forum, they've put extreme weather events as the number one business risk in their global risks report for 2024, so, now, climate change is really a board level topic. It's a physical risk and it's real. With the SEC's disclosures due in January of next year certainly in the US and in Europe, Corporate Sustainability Reporting Directive going live again in January of next year, there's a huge sense of urgency. Companies need to get prepared. Ultimately, it's about doing the right thing and it's also about making sure that, as a business, you can take the right mitigating actions for things like climate risk....

Rebecca Knight

>> and you're abiding by the law of these new regulations coming down, too.

Levent Ergin

>> Exactly.

>> Yeah. I mean, we were talking about the fact that, and we talked about it a little bit yesterday, it's really about that risk aspect of it and being able to protect yourself and your company, but also do right for the planet and understand, because if you don't know what your risk is or where your hot topic areas are, you can't solve for it. To me, that's a data problem. I know we've been talking about it in the other two sessions. Understanding where that comes from and how that comes together would seem like, again, a reason why Informatica has doubled down in this area and had some product announcements in this area as well.

Levent Ergin

>> Yeah. Absolutely. Absolutely. We launched Intelligent Data Management for ESG sustainability last year at Informatica World. Amit announced that and, certainly, we've been adding more innovations to that. I'm definitely going to touch on some of those in this session. One of the interesting things that you made me reflect on right now is there's a concept of single materiality and double materiality, and now I want to simplify that and what that means. In the US, we are aligned to SASB, which is Sustainability Accounting Standards Board, which is around single materiality, meaning, what are the impacts of the environment, social governance, ESG such as climate risk on our business? However, in Europe, there's the concept of double materiality, which is what are the impacts of our company on the environment, the people and the planet? Now, for companies that are headquartered in the US that has legal entities in Europe, they need to do double materiality. This is where you need intensive data. When we look at Corporate Sustainability Reporting Directive, there is over 1,400 KPIs that you need to look at, and you need to do a materiality assessment to understand, based on the industry vertical you're in, which ones apply to you so that you can then report on those things. Yeah, this is very data intensive, and you need to be able to evidence everything you do with data to not only mitigate the risks of greenwashing, but to also have ESG audit-ready data for your ESG disclosures.

>> Yeah. I mean, I think, to me, and we were talking about this off-air, it's the fact that, I was not even joking, I was asked by a Global 50 company, "What is the most sustainable cloud to go put your stuff in and to do AI in?" I was sitting there and I'm like, "Well, that's interesting." I'm like, "I don't even know how to answer that question because sustainability varies so greatly." Cloud is just another data center. It's really an operating model that could be on-prem or in somebody else's data center. What are you seeing with how people are looking at normalizing, because the data is, and we were just talking about it with Deloitte about this, normalizing the data and trying to say, "Okay, I'm getting it from this supplier?" I'm getting it from this supplier, and maybe it doesn't have everything I need and I'm trying to work with that supplier to get all of that data and then I got to put it all into the same format to now satisfy the SEC or one of the governments or the EU or whoever I need to send these reports to. How is what you're doing and where the product set is going with ClearGPT and others that are really helping in that effort, I guess, you could say?

Levent Ergin

>> Great question. Let's double click into greenhouse gas emissions, which is really the E of ESG, the main topic there. If we double click into greenhouse gas emissions, to give a relevant example, just like you have accounting standards, you might have IFRS, US GAAP, you need to have carbon accounting standards. For that, we have the Greenhouse Gas Protocol. That's like your golden standard. To even double click into the Greenhouse Gas Protocol, you have, as you alluded in the previous session, your scope one, two and three scope, one being your direct operations and anything you burn and what comes out of pipes. Scope two is the indirect emissions such as purchased electricity, what did the grid produce in terms of carbon, and then scope three, which is the biggest challenge, which is your carbon emissions in your supply chain which makes up more than 80% of the carbon footprint for companies where they might be using a cloud provider, and they need to understand their carbon footprint of the cloud provider because it's in their scope three. At Informatica, what we've done is build a data model that aligns to the Greenhouse Gas Protocol so that we can do all the heavy lifting around collecting this data. Now, to be able to collect this data, you need to look at your purchasing activity which lives in your ERP systems. When we talk to a multinational, each line of business is using a different system, sometimes multiple versions of that. Maybe they'll have 20 versions of SAP in one line of business. In another one, they might be using Ariba. In another one, they might be using Coupa. In another one, they might be using Oracle. How do you go about understanding the purchasing data which lives in your materials master in all of your ERP systems, then consolidate that at a legal entity level and then at a group consolidated level? That's a massive data challenge. We have lots of connectors that can look at the data model at source, replicate it at the target, move it across and then start enriching that with all of the ESG data that you need. When we think about supply chains, most of our customers have got more than 20,000 suppliers in our supply chain. This is how we accelerate the risk assessment process by leveraging ESG rating agencies such as Dun & Bradstreet where they give us access to 80 million public and private company records so that we can rapidly pull that to a centralized place for our customers who can then leverage that data for their actual ESG disclosures.

>> Yeah. I think you just hit on something that a light bulb went off in my head. There's different verticals, and Informatica talks to different verticals. What are some of the challenges across different verticals, and how do you bring it home for them?

Levent Ergin

>> Yeah, so a great question, let's start with the financial services, which is the most regulated industry. They were the first ones to start because, when you want to create a positive wave of change, you do that with a financial system, right? It's the big dam. You get wholesale funding from your central bank's wholesale line of credit, then banks turn that into products and they give that to the market. The challenge for the financial system is what we call financed emissions, meaning, what is the carbon footprint of the different asset classes that they are financing? This is where companies need to be able to understand, let's say, if they've invested in a security, what is the carbon footprint of that security? That's where we have our security's Master Data Management, enrich that with carbon emissions data. Everything in the non-financial services sector, any industry vertical with a supply chain is facing this massive scope three challenge-

>> Yeah. Yeah, like CPG. Yeah....

Levent Ergin

>> manufacturing, retail, CPG, life sciences in sourcing the various ingredients of their treatments, and even healthcare with all of their different supply chain implications there. This is certainly a cross-industry challenge, but each of them have got what we call materiality factors or different areas of concentrated ESG risks.

Rebecca Knight

>> I wonder if you could talk a little bit about a few further innovations that Informatica is working on particularly as it relates to the real differences that you just described earlier in terms of North American regulations and European regulations and, frankly, really the differences in outlook of these two regions of the world in terms of how they think about the very real risks of climate risk in terms of "is it my business that I'm worried about" or "is it my business and its impact on the environment"?

Levent Ergin

>> Great question. If we reflect on the latest SEC ruling, it scaled back the requirements compared to Europe. In the US, it's now only scope one and two, but in Europe it's also scope three, which is the carbon emissions in the supply chain. Now, for a multinational that has legal entities in North America and Europe, they need to do the whole shebang. The latest innovations that we are enabling for our customers is the ability to be able to tap into geospatial remote sensing data where you can get real, live information from space about these climate risks that are developing. What that allows you to do is then see your risks on a T plus 30-day timeline, which is approaching very quickly, all the way out to 2050. What this enables companies to be able to do is, depending on the industry vertical, for example, insurance is one of the heaviest-hit sectors, we certainly had the capital stress testing reveal that, but, for every other industry vertical for supply chains, you could start to understand if one of your suppliers is going to be hit by a hurricane or some kind of a extreme weather event so that you can think about what alternate sourcing you're going to do. All of these types of things are essentially not going to only help with business resilience, but also unlock innovation, so using climate risks for innovating in their actual industries.

Rebecca Knight

>> Amazing. Amazing. Well, Levent, this has been so interesting and really a fascinating conversation. Thank you so much for returning to theCUBE to share your insights.

Levent Ergin

>> Thanks for having me.

Rebecca Knight

>> I'm Rebecca Knight for Rob Strechay. Stay tuned for one last segment of theCUBE's live coverage of Informatica World here at the Mandalay Bay Convention Center. You're watching theCUBE, the leader in enterprise tech news and analysis.