Environmental Finance's in-person conference on The Future of ESG Data this week highlighted the numerous challenges that are being addressed in the space, as related regulatory and market developments unfold at record pace
Over 40 speakers across 13 sessions and two streams provided analysis on topics from the evolution of standards and regulation, to corporate disclosures and identifying metrics for nature, biodiversity and social data.
Here is a roundup of some of the main stories written at the event.
The ISSB 'global baseline'
- ISSB targets adoption of global baseline standards 'as soon as they are finalised' – IFRS Foundation executive director Lee White delivered a keynote address on the sustainability reporting guidelines being developed by the International Sustainability Standards Board (ISSB)
- IOSCO urges ISSB to deliver for emerging markets – IOSCO senior policy advisor Kris Nathanail said IOSCO approval will be important for the ISSB by giving a global stamp to the standards. A full recording of the keynote address can be viewed here
- Nathanail also expanded on the challenges facing IOSCO in a Q&A here
Regulation and reporting
- SEC Commissioner to push for 'robust' sustainability disclosure in US – US Securities and Exchange Commission (SEC), Jaime Lizárraga spoke in favour of the proposed sustainability reporting rules and pledged to help make them "as robust as possible".
- Fund-level scenario analysis requirement is 'regulatory overkill' - The merits and shortcomings of scenario analysis were debated by Sompo International, Abrdn and GAM Investments.
- Taxonomy 'useless' as investment tool until disclosure improves – The way in which fund managers use estimates to satisfy the EU Sustainable Finance Disclosure Regulation should be a concern, according to Anne Schoemaker, director of ESG products at Morningstar Sustainalytics.
- ISS: ESG data will be regulated within three years – Reinhilde Weidacher, global head of ESG data strategy at ISS ESG, predicted at the event that ESG data providers will be regulated within three years as the industry has become more mainstream.
- Sustainability standards will transform investor relations - Having a set of sustainability standards will facilitate corporates' relations with their investors and focus discussion on qualitative aspects rather than data issues, according to TotalEnergies ESG reporting manager, Florence Renouard de Maistre.
- Maersk on limited and reasonable assurance – Maersk's head of corporate sustainability and ESG, Lene Bjørn Serpa discusses the role of assurance in strengthening internal controls.
Transition strategies and net zero
- Corporate transition plans need CFRF 'climate dashboard' equivalent - Corporate transition plan reporting would benefit from a 'climate disclosure dashboard' similar to that developed by the Climate Financial Risk Forum (CFRF) for financial institutions, according to Impax AM sustainability and ESG head Lisa Beauvilain.
- Aviva: UK must 'send clear policy signals' on transition plan consistency - Ahead of the UK Transition Plan Taskforce (TPT) publishing its draft framework in early November, TPT co-chair Aviva called on the UK government and regulators to set out clear and consistent guidelines for net-zero transition plans.
- Brunel: Confronting social and climate issues together is 'critical' – Handling social issues like diversity alongside climate change will be crucial in the transition to a low-carbon global economy, Helen Price, head of stewardship at the pensions group at Brunel Pension Partnership, said.
Challenges in data collection and analysis
- Dealing with inconsistent ESG data – BlackRock UK sustainability head David Hickey said that consistent investment decisions using current ESG data is "largely impossible" across different asset classes.
- Binary views on double materiality 'unhelpful', says FCA – Mark Manning, technical specialist, sustainable finance and stewardship at the UK's Financial Conduct Authority, told delegates that the distinctions between enterprise value materiality and double materiality have often been painted as "too stark".
Nature and biodiversity
- Investors calling on TNFD to address nature restoration - James d'Ath, data and analytics technical lead at the Taskforce on Nature-related Financial Disclosures (TNFD), said the group is consistently receiving feedback that investors need to see more opportunities for investment in nature regeneration.
- Biodiversity among biggest challenges for EDF sustainability reporting – Reporting on biodiversity will be one of the most difficult aspects of sustainability reporting, Eliza Mahdavy-Turcat, group head of ESG performance for Électricité de France (EDF) told delegates.
Companies:ISSBIOSCOFCASECMorningstar SustainalyticsISS ESGAvivaBrunel Pension PartnershipBlackRockTNFDEDFSompo InternationalAbrdnGAM InvestmentsIMPAX AM