Mar 18, 2021

Sustainable Finance Market Update Series

Sustainable Finance Market Update Series

Recognizing that issues related to sustainability are underpinning better risk management practices in financial institutions, the Financial Centres for Sustainability (FC4S) Network is launching the Sustainable Finance Market Update Series. In the run-up to COP26, 1st – 12th November the aim of the Series is to provide a review of the main market developments to mobilize green and sustainable finance and bring examples of supporting national and international guidance and regulations. 

The first edition consists of a review of the existing Market Infrastructure supporting sustainable finance activities, including the frameworks and market trends in disclosure and reporting, ESG service providers, challenges and opportunities of data quality and relevant taxonomies. It also provides an overview of 20 tools that quantify and measure different aspects of companies’ ESG impact. 

Highlights

  • An array of disclosure standards and frameworks are available targeting different stakeholders. Several initiatives are in place to drive convergence and alignment of these standards as well as to reduce reporting costs and risks of greenwashing. 
  • The data and analytics industry has grown fast in the sustainability domain. Even so, there are still issues related to quality of data, comparability and harmonization, which need to be addressed to ensure data reliability, consistency and comparability.
  • There is a growing number of ESG service providers including the ESG and risk rating providers, climate index providers and external reviewers. They are all currently perfecting the quality of their services relying on digital technologies, since the industry has recognized their role in speeding up and guaranteeing decision- making. 
  • Market infrastructure supporting sustainable finance is growing fast. Financial actors and authorities are recognizing the importance of disclosure and reporting and generating ESG quality data. Along with this increase, different standards, frameworks, tools and ESG service providers are appearing in the market.