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FoSDA publishes key reports on ESG Data ahead of COP26

Brussels, 28 October – FoSDA is delighted to present its package of reports examining the global ESG data space from two of its most pertinent aspects: ESG data gaps & holes and forward-looking ESG data. Both are a culmination of months of collaborative work among FoSDA’s wide network of Partners, as well as its Data Council of ESG data providers, and are aimed at adding to regulatory, market and wider stakeholder understanding of how ongoing ESG data issues can be better understood and resolved.  

These reports represent only a first step in their respective FoSDA workstreams, and their key findings will guide FoSDA’s next steps when seeking ways in which it can continue to contribute to the policy discourse on making ESG data a crucial facilitator for sustainable objectives.

ESG Data Gaps & Holes

The FoSDA Data Council Perspective

With the rising importance of sustainable investing and ESG disclosure requirements for financial market participants, the Future of Sustainable Data Alliance’s (FoSDA) Data Council seeks to:

Map ‘Gaps’ and ‘Holes’ in currently available raw ESG data

Identify the rationale behind the classification of Gaps and Holes

Share best practices and approaches to fill identified Gaps and Holes

Data ‘Gaps’

are defined as instances where reporting frameworks exist and datasets are requested and collected – but they are not always adequately populated.

Data ‘Holes’

go beyond Gaps, and represent instances where there are limited robust frameworks, guidance, or best practices, and where at times there is uncertainty about what exact data would be needed or most useful.

Identifying and mitigating ESG Data Gaps and Holes would not only allow market actors to fulfill their upcoming ESG reporting obligations more accurately but would also facilitate their wider efforts in financing the transition to a sustainable economy.

Sherry Madera, Chair of FoSDA and Ludovic D’Otreppe, Executive Director, V.E an affiliate of Moody’s talk about the key ESG Data Gaps and Holes that were identified by FoSDA’s Data Council, as well as some ways to mitigate them.

Forward Looking ESG Data

FoSDA Review 2021

As more emphasis is put on the financial sector to implement net-zero targets, and companies are progressively being encouraged by market participants to provide forward-looking information, the significance of forward-looking data cannot be underestimated. To move towards green financing, institutions must move beyond historical reporting to implement targets, disclosure requirements and portfolio transition. To this end, the FoSDA Forward Looking Data Workstream has produced this white paper based on extensive interviews and engagement with policymakers and financial industry experts to highlight the unique characteristics of forward data used in sustainable finance.  This report will set out:

Definitions of Forward Looking Data

Temporality review of data gaps and holes

Unique Challenges for forward looking data including the “Missing Middle”

Recommendations for policymakers

The FoSDA work on forward looking data will continue across workstreams for 2022.

Sherry Madera, Chair of FoSDA and Danae Kyriakopoulou, Senior Policy Fellow, LSE discuss what Forward Looking ESG Data is needed for financial institutions to meet their stress testing and scenario analysis needs and requirements.