The role of data in sustainable investment, policy and regulation

The role of data in sustainable investment, policy and regulation feature image

The move towards sustainability is accelerating even as the global economy grapples with the consequences of Covid-19, an OMFIF-Refinitiv report shows

  • Climate issues highlight technical gaps in the practical usage of non-financial data
  • Granular tracking through technology has improved, but regulators and investors struggle to determine precise attribution e.g. via Scope 3 emissions along global value chains
  • New data demands in the wake of the Covid-19 pandemic; regulatory and industry emphasis has rebalanced away from principally environmental issues to a more holistic focus across the three ESG pillars

Socioeconomic resilience in the face of risks such as the pandemic and climate change is moving to the forefront of agendas across the financial sector. Stakeholders are unanimous in the belief that clear and consistent environmental, social and governance data will be critical to realign the financial markets towards sustainable development and help achieve the sustainable development goals. While there has been significant progress in disclosure of information in relation to environmental and societal impacts over the past decade, this field is still young with unrealised potential.

Complementary advances in data capture, sharing and storage technologies, as well as in data analytics, are paving the way for understanding and extracting information for decision-making on non-financial issues. Central banks, supervisors and private firms are engaging in deeper levels of collaboration to develop common disclosure standards and governance frameworks for non-financial data via platforms such as the Central Banks and Supervisors Network for Greening the Financial System.

FoSDA & ASIFMA Interim report – Data Challenges relating to ESG and Sustainable Finance in Asia Pacific


Future of Sustainable Data Alliance

The Asia Securities Industry and Financial Markets Association (ASIFMA) is a partner of the Future of Sustainable Data Alliance (FOSDA) and is leading theworkstream to understand data challenges for environmental, social, and governance (ESG) and Sustainable Finance in the AsiaPacificregion.

FOSDAseeks to address the following question:

What data do investors and governments need to meet the requirements of regulators, citizens and market demand for sustainable investments and portfolios to 2030?

FOSDA’s key objectives:

  1. Articulate future ESG data requirementsof investors and governments to accurately integrate ESG data into decision making;
  2. Promote new technology capabilitiesand data by highlight the key role that new technology and data sets must play in the transition to sustainable development; and
  3. Address UN Sustainable Development Goals (“SDGs”) related data needsand how to satisfy them for investors wanting to take greater account of SDG-related risks and impacts.