How financial services can use code optimisation to meet ESG requirements

By Dr Leslie Kanthan, CEO and Co-founder of TurinTech AI

In the current landscape where Environmental, Social, Governance (ESG) risk management is increasingly significant, businesses are actively seeking the most effective strategies to ensure they are aligned with these standards. It’s no longer purely about profit, it’s also about encompassing a commitment to values.

To manage this period of change, it’s crucial for companies to gain a strong grasp of the new policies and regulations related to ESG. Additionally, they must explore and utilise advanced tools that can boost their journey towards achieving their objectives.

Understanding the ESG framework

First we must begin with an in-depth examination of the fundamental concepts and policies governing ESG. For financial institutions to meet these requirements, they must first understand the nuances of how ESG factors are integrated into corporate strategies, shaping the way organisations operate and interact with the wider world.

Environmental considerations focus on a company’s impact on the planet, encompassing aspects such as carbon footprint, resource management, and ecological sustainability. Social elements examine how a company manages relationships with employees, suppliers, customers, and communities, emphasising social responsibility and ethical practices. Lastly, Governance involves the internal systems, controls, and procedures that dictate corporate conduct, ensuring accountability and transparency in decision-making.

Ultimately, by understanding these components, we are able to truly understand the role it is playing in modern business and its growing influence in shaping ethical and sustainable corporate behaviour. But how does this actually impact businesses?

ESG principles, policies and regulations

The ESG framework is defined by various principles, standards, and regulatory requirements that are recognised worldwide and by different governing bodies.

One notable example is the Principles for Responsible Investment (PRI), a collaborative initiative with the United Nations Environment Programme Finance Initiative ( and the UN Global Compact ( This initiative has introduced six principles that guide responsible investment practices, integrating ESG considerations into the process.

In the European Union, the implementation of the Non-Financial Reporting Directive (NFRD) and the Sustainable Finance Disclosure Regulation (SFDR) stands out. These directives provide guidelines for organisations to disclose non-financial and sustainability-related information, aiming to enhance transparency in their environmental and social engagements.

In the UK, the Financial Conduct Authority (FCA) has outlined its approach to incorporating ESG priorities within the financial sector. This strategy reflects an increasing recognition of the importance of ESG factors, encouraging sustainable practices within the financial industry and serving as a model for similar regulatory efforts in other regions. This growing focus on ESG underscores a broader shift towards more accountable and sustainable business practices globally.

Code optimisation for ESG

A central aspect of ESG is the management of environmental factors, particularly those related to climate change. The UK government, recognising this, has issued mandatory climate-related financial disclosure guidelines for certain companies.

These guidelines require specific companies and Limited Liability Partnerships to report on several aspects: how climate change is factored into their corporate governance, its influence on their strategy, the management of climate-related risks and opportunities, and the metrics and targets used in handling these issues.

The environmental impact of technology is significant. A study by the University of Massachusetts Amherst suggests that training a single Natural Language Processing model can result in approximately 300,000 kg of carbon emissions. To put this into perspective, an article from MIT Technology Review notes that this amount is about five times the lifetime emissions of an average American car, including its manufacturing.

In the financial sector, where large volumes of data and software are prevalent, the need to monitor and minimise factors like carbon emissions and energy usage is particularly pressing.

In this scenario, code optimisation emerges as a crucial element of ESG strategy. By refining code and reducing inefficiencies, not only is there a decrease in the energy consumption and carbon emissions of systems, but there’s also an improvement in operational speed. This leads to enhanced service delivery and increased client satisfaction, demonstrating that effective code optimisation can have a substantial positive impact on both the environment and business performance.

The bottom line

By streamlining and automating the code optimisation process, companies are not only equipped to stay in step with the dynamic ESG regulatory landscape but also positioned to harness a range of significant benefits. This modern approach to coding offers a more efficient, agile, and responsive framework for addressing ESG factors in tech.

The automation of code optimisation translates into a more effective and less resource-intensive management of software. It reduces the time and effort required for manual code refinement, allowing companies to allocate their resources more strategically. This leads to a more sustainable use of computational power and a noticeable decrease in energy consumption, which is crucial for reducing the carbon footprint associated with large-scale data processing and software operations.

The urgency of adhering to ESG objectives is increasingly critical and companies in the financial sector must adapt to the dynamic requirements. This means that incorporating optimised code is becoming an indispensable element of their sustainability strategies.


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