Written by Pooja Bokhiria and Alex Gillespie
On 26 May 2021, the Network for Greening the Financial System (‘NGFS’) published a progress report on bridging climate-related data gaps. The report forms part of the first phase of its work programme on bridging the data gaps.
The report sets out the issues that need to be considered going forward with a view to laying the groundwork for a comprehensive assessment of climate-related data needs and gaps.
Key points to note from the report are:
- “Reliable and comparable climate-related data are indeed crucial for financial sector stakeholders to assess financial stability risks, properly price and manage climate-related risks, and take advantage of the opportunities arising from the transition to a low-carbon economy. However, persistent gaps in climate-related data hinder the achievement of these objectives. Stakeholders report the need for more forward-looking data (e.g. targets or emissions pathways) and granular data (e.g. geographical data at entity and asset-levels). They are also calling for assurance about the quality of climate-related through verification and audit mechanisms, as well as improvements in data accessibility.”
- “To ensure the availability of reliable and comparable climate-related data, a mix of policy interventions is needed to catalyse progress. Three building blocks are paramount: (i) rapid convergence towards a common and consistent set of global disclosure standards, (ii) efforts towards a minimally accepted global taxonomy, and (iii) the development and transparent use of well-defined and decision-useful metrics, certification labels and methodological standards.”
The NGFS’s report is intended to provide valuable input to support the work on climate-related data undertaken at the international level by the Financial Stability Board and the G20.