Here’s how data can help us fix the climate

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Sherry Madera, Chief Industry and Government Affairs Officer, Refinitiv

  • Inadequate data holds back the allocation of funds to sustainable projects.
  • Regulators can cooperate with data providers and industry to identify data gaps.
  • Sustainability experts and data scientists are needed to ensure that data is properly collected, reported and deployed in investment decisions.

It has been more than a decade since former UN Secretary-General Ban Ki-moon called climate change the “defining challenge of our era”. There is now widespread scientific evidence pointing to human responsibility in the warming of the climate.

Climate change transcends geographical boundaries and acts as a threat multiplier, exacerbating food shortages, migration and conflict. The exploitation of natural resources, related mass production and globalization have created an environment leading to global pandemics such as the one we are experiencing today.

Despite global acknowledgement of this immediate threat, capital investors still do not have the data needed to allow enough understanding and effective integration of sustainability considerations into investment decisions, resulting in capital being allocated to environmentally or socially damaging projects and assets.

For this reason, in January 2020 in Davos, Refinitiv and the World Economic Forum spearheaded the formation of the Future of Sustainable Data Alliance (FoSDA), a multi-member alliance with the goal of addressing the climate crisis from a data perspective and fostering collaboration in financial markets. FoSDA believes that investors need reliable, decision-ready data to confidently invest in sustainable economic activities.

Founding partners of FoSDA include; the UN, the Institute of International Finance, Asia Securities Industry & Financial Markets Association, Tsinghua University, the Official Monetary and Financial Institutions Forum, the Global Financial Markets Association, Climate Bonds Initiative, FinTech4good, Everledger, Oxford University, the Spatial Finance Initiative, Catapult, Finance for Biodiversity, GoImpact and Icebreaker One.

With its one-year anniversary this month and the ever pressing need to address climate change, FoSDA is actively engaging new partners and supporters to move into phase 2 at a pivotal time for the Alliance and our planet.

Why does it matter?

FoSDA was formed to ask the central question: what data is required for financial markets to build a sustainable future?

The current ESG landscape is plagued by data gaps and data holes. A data gap is a well-defined dataset that still requires populating. A data hole is where we know we need data to measure or monitor a material impact, but the data either doesn’t exist or hasn’t yet been defined.

This missing crucial information is problematic for both industry and policy decision-making. It creates challenges for investors seeking to deploy capital sustainably, for companies and issuers benchmarking their actions, and for regulators assessing systemic risk and risk management.

Data is a building block to achieving global financial sustainability. Inadequate data prevents regulators from recognizing areas where public action might be needed to address environmental and social problems, it holds back the allocation of funds to sustainable projects, hinders financial institutions from carefully assessing ESG risks, and prevents governments from determining deficiencies in compliance. Therefore, tackling data gaps and data holes is a pressing issue for multiple stakeholders united in fostering the collection and processing of ESG data.

How do we achieve these objectives?

On 10 December 2020, FoSDA published a series of recommendations driven by three primary themes:

1. Defining and creating a path to filling ESG data gaps and data holes

An important data hole identified by the Alliance is data for biodiversity. Today’s regulatory requirements are heavily focused on climate; an overarching and holistic understanding of sustainability risks and opportunities should be promoted, embracing a wider spectrum of nature-based data to support net zero targets.

The following model suggests how regulatory authorities can cooperate with data providers and industry to identify data holes and gaps and build effective regulatory compliance.

How to identify data holes and gaps.
Image: Refinitiv

Furthermore, the Alliance calls on the industry to move away from a yes-or-no binary reporting, toward more detailed reporting. Regulators should reorient their focus to more forward-looking datasets, for example via scenario analysis and “alternative worlds” models, whilst ensuring harmonization between reporting, risk management, and standard setting. To this end, standard setting bodies should accelerate convergence towards common definitions in the ESG reporting space in partnership with the data ecosystem.

2. Mapping data to sustainability taxonomies and policies

Taxonomies strive to create definitional frameworks of what is and what is not “green”. While global organizations work to compare and harmonize various global taxonomies, the Alliance believes clearly mapping the datasets required for each of the taxonomy obligations is essential to make efficient use of these taxonomy frameworks.

This requirement to map the data also applies to regulatory policies being implemented worldwide. Financial institutions require clear guidance on which datasets will help them fulfil their regulatory obligations. The willingness to comply must be matched with the clarity of what data is required to do so.

3. The global need for ESG data talent development

Sustainability experts and data scientists are needed to ensure that data is properly collected, reported and deployed in investment decisions. Governments, regulators and industry should join forces in supporting data skills and educational programmes, which would help create a talent pool for meeting these objectives, whilst also ensuring that innovative technologies such as AI and blockchain are manufactured and deployed sustainably.

What’s the World Economic Forum doing about climate change?

Climate change poses an urgent threat demanding decisive action. Communities around the world are already experiencing increased climate impacts, from droughts to floods to rising seas. The World Economic Forum’s Global Risks Report continues to rank these environmental threats at the top of the list.

To limit global temperature rise to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policy-makers, and civil society advance comprehensive near- and long-term climate actions in line with the goals of the Paris Agreement on climate change.Global warming can be beaten thanks to this simple plan

The World Economic Forum’s Climate Initiative supports the scaling and acceleration of global climate action through public and private-sector collaboration. The Initiative works across several workstreams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions to transitioning to a low-carbon, climate-resilient economy. CEOs use their position and influence with policy-makers and corporate partners to accelerate the transition and realize the economic benefits of delivering a safer climate.

Contact us to get involved.

Gathering the world’s thinkers now

As we all navigate the challenges of the COVID-19 pandemic and resulting economic crisis, the global environmental crisis has not declined nor has it been relegated in importance. We all recognize the need to build back better and include sustainability in our future growth plans.

FoSDA will play its role by drawing on the collective expertise and experience of its partners, highlighting what work is needed to make ESG data comprehensive and, by working with regulators, offering recommendations to achieve that. In practical terms, the Alliance seeks to achieve its goals by serving three purposes:

  • Facilitating exchange of experience and insights on ESG data;
  • Acting as a forum to map, harmonize and promote common standards and best practices;
  • Producing recommendations jointly with regulators, data providers and the industry to empower organizations to meet our shared goals of economic stability and inclusive growth.

There has never been a more important time to rapidly achieve the goals of sustainable finance for the global good. FoSDA will continue its work to improve the fundamental building block of that journey: data.

Join us on the journey.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year


At Davos, UN chief urges ‘big emitters’ to take climate action

In Bahrain, Global Forum for Entrepreneurs and Investment examines empowerment of women, youth through innovation

UN chief hails victory of ‘political will’ in historic Republic of North Macedonia accord

COP21 Breaking News_05 December: UN Secretary-General Announces “Climate Action 2016” Partnership

‘Repeated attacks’ could close down key hospital in eastern Libya, says WHO

UN chief highlights action across borders for ‘stable and prosperous Eurasia’

Half the world’s population is still offline. Here’s why that matters

Here’s why China’s trade deal with Mauritius matters

Bangladesh, South Africa and Bolivia all beat the US for women’s representation in politics

Climate change and its adverse impacts on health

Autonomous vehicles could clog city centres: a lesson from Boston

Speeches of Vice Premier LIU He and Vice President of the European Commission Jyrki Katainen at the Press Conference of the Seventh China-EU High-level Economic and Trade Dialogue

Time to make a fundamental choice about the future of healthcare

Thinking throughout HIV: changing a perspective

OECD Steel Committee concerned about excess capacity in steel sector

Building a European Health Union: Stronger crisis preparedness and response for Europe

4 rules to stop governments misusing COVID-19 tech after the crisis

Syrian Government’s ‘different understanding’ of UN role, a ‘very serious challenge’ – Special Envoy

Illicit trade endangers the environment, the law and the SDGs. We need a global response

LGBTQ+: The social evolution of a minority

Seaweed, enzymes and compostable cups: Can ‘Big Food’ take on plastic and win?

Coronavirus: the Commission mobilises all of its resources to protect lives and livelihoods

The EU prepares for the end of LIBOR: the Commission welcomes the agreement reached between the European Parliament and the Council on financial benchmarks

Our healthcare systems are ailing. Here’s how to make them better

Hiring more female leaders is good for profits. Here’s the evidence

Which countries get the most sleep – and how much do we really need?

Cancer research put at risk by General Data Protection Regulation? The possible dangers of a data privacy EU mania

Finland has just published everyone’s taxes on ‘National Jealousy Day’

Fighting against the Public Health System dismantling means guaranteeing assistance to all

8th Euronest Assembly: the future of relations with Eastern partners

Germany may prove right rejecting Commission’s bank resolution scheme

Parliament criticises Council’s rejection of money laundering blacklist

Revamp collective bargaining to prevent rising labour market inequalities in rapidly changing world of work

Summer pause gives time to rethink Eurozone’s problems

China in my eyes

Why 2020 will see the birth of the ‘trust economy’

Costa Rica is one of the world’s happiest countries. Here’s what it does differently

Providing mental health during pandemic times

Four ways Artificial Intelligence can make healthcare more efficient and affordable

Closing the gaps in accelerating women’s rights: the role of medical students

Does Draghi have another ace up his sleeve given his Quantitative Easing failure?

Youth Internationalization: part of everyday life in JADE

The link between air pollution and COVID-19 deaths

Execution of juvenile offender in Iran ‘deeply distressing’ – UN rights chief

Protecting farmers and quality products: vote on EU farm policy reform plans

What’s needed to ensure maternal health for women in vulnerable populations

Historical success for the First ever European Presidential Debate

Trump declares emergency and WHO urges speed – latest coronavirus updates

Joint U.S.-EU Statement following President Juncker’s visit to the White House

10 months were not enough for the EU to save the environment but 2 days are

European Junior Enterprises to address the significant skills mismatch in the EU between school and employment

Schools must look to the future when connecting students to the internet

The European Sting’s 2018 in most critical review

Mental health in midst of a pandemic: can we help?

EU ready to relinquish its internal tax havens

Why youth unemployment is so difficult to counter

‘Maintain calm’ and ‘exercise patience’ UN envoy urges, as Nigeria heads to polls

Why the 21st century’s biggest health challenge is our shared responsibility

Eurozone: Negative statistics bring deflation and recession closer

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s