Assets: the scale of Spatial Finance

Scale is a wonderfully confusing word for digital geographers. When considering Spatial Finance this will only get worse: assets can be any size, multiple, and could move. What's a geographer to do?

In May of 2022, Jesse Mauch, one of Spakgeo’s project management staff, wrote a comprehensive article on the nature of geospatial technology for the management of asset data in the commercial and enterprise sectors. Asset Data - a case for geospatial is a great introduction to this concept and an essential starting point for this discussion.

Photo by Ashraful Islam on Unsplash

There are a few absolutely critical features to this discussion. Firstly that assets, the things a company might use or own, could take a multitude of forms. We could be talking about buildings, container vessels, or the goods being moved by those container vessels. We could be talking about a farm or a portfolio of mortgages. A highway or railway is an asset, as might be a canal. Some of these things are enormous; others are pretty small. Some of these things change, and many of them move. All of them have effects on other assets, hold risks, and affect the landscapes they touch.

From a geographic data perspective, the word “asset” is a pain because it has become a catch-all. But given recent announcements from the Securities and Exchange Commission and Financial Conduct Authority, assets will become a pain for more than just the geographers amongst us. Assets and their environmental impacts will have to be meaningfully reported. This, as the WWF highlight, can be done reasonably via geospatial technology. The key, and somewhat embarrassing, problem is that not every enterprise knows exactly where its assets are. Worse, if regulators start to hold companies responsible for their supply chains, too, then things will become deeply murky. It is quite possible for a vehicle manufacturer to manage their own ESG impacts, but can they measure or manage that of all the mineral companies from whom they source basic materials? Without a doubt, our society does not have an adequate map of every building on our planet, let alone any notion of who might own those buildings. And every day, more buildings are erected.

Where are we left? At this point, it appears many organizations will fall at the first ESG hurdle: having an adequate inventory of value-creating assets. Interestingly this problem compounds. The Investors, who are motivated to demonstrate their suite of investments are sound and well managed, will need those investments, The Corporates, to have their ESG houses in order. Thus, investment funds will push on the corporates, who will, in turn, press their supply chains, who will simply not know or want to know their full suite of assets.

With effort, this lack of data will be solved quickly through a combination of NLP, geospatial technology, and satellite imagery. The absolute ownership of an asset will be harder to determine, though, on a jurisdictional level, the data must exist. But in the murky world of strategic corporate ambiguity, the layers of absolute ownership may always appear somewhat opaque. This opacity will likely have to be cleaned up before any reporting is undertaken to avoid any possibility of green-washing.

We should pause briefly and think through the three places where asset mapping makes the most sense given our changing financial regulatory needs:

1. ESG Reporting

   Knowing assets and their effect on surrounding environments.

2. Risk Identification

   Knowing assets and their susceptibility to climate (or other) risks.

3. Auditing

   The auditing of any ESG-related filings.

Within each of these three areas, we must consider the assets of the company in question and the assets of that company’s supply chain. Each of these questions should comprise a point location, the physical building, a parcel of ownership, and then a broader area of influence which could extend to a basin or catchment. Unfortunately, in most cases, an address is the only available information product, and in many cases, that address in question is not relevant to the asset but to the head office of the company in question.

To some extent, an open-data approach to building-related data would provide enormous community value. But, it is hard to see how an open approach could succeed when it comes to asset ownership data. Attempts have been made in this regard by well-meaning organizations and citizen-led groups, especially in more contentious industries (Natural Resources, etc.), but these efforts have faced difficulties being exhaustive. While there is some benefit to a company in knowing and reporting on its own assets, there is little advantage to sharing this data broadly. Regulation could solve this by enforcing some kind of common registry, but that level of oversight seems unlikely and would be seen as a significant overreach by many.

Instead, the problem will be faced by numerous companies across the commercial spectrum. Some will lead, and some will desperately try to avoid, but for the most part, we will see a deepening data literacy and a greater sense of responsibility as bandaids get collectively ripped off the wounds of conveniently ambiguous supply chains. And, if the geospatial community so wishes, we can provide services for both the band-aid ripping and the subsequent corporate salves. When it comes to it, “knowing where my stuff is” seems like the most simple corporate requirement, but as usual, all those words each hold geographic ambiguity, and the geospatial community is exceptionally well positioned to help.