Featured Product

    NGFS Recommends Policy Actions to Bridge Gaps in Climate Risk Data

    July 06, 2022

    The Network for Greening the Financial System (NGFS) published the final report on bridging gaps in the climate risk data and offers actionable policy recommendations.

    NGFS started a workstream on Bridging Data Gaps in July 2020, following which it published a progress report in May 2021. The progress report highlighted how persistent climate data gaps hindered the achievement of climate objectives and identified three building blocks to bridge these gaps. These building blocks were rapid convergence toward consistent set of global disclosure standards, efforts toward a minimally accepted global taxonomy, and use of well-defined and decision-useful metrics, certification labels, and methodological standards. The recently published final report on bridging data gaps advances a robust climate information architecture by laying out the rationale, organization, content, and the description of the “directory.” The directory can be thought of, and used, as a catalog of available climate-related metrics and data sources based on specific stakeholder use cases. The directory is intended to help financial sector stakeholders identify important and relevant climate-related data sources to meet their needs and facilitate access to the data, thus improving the broader dissemination of existing climate-related data. The report also makes actionable recommendations, building on initiatives, regulations, and policies that have emerged over the past months under the COP26 umbrella.

    The report notes that the directory content can be used to draw evidence-based conclusions on the main climate-related data gaps and highlight key challenges to close such gaps. The report indicates that climate-related data  lack relevant benchmarks,  often rely on estimations and modeling, is sometimes incomplete,  lack specific location information, and come at a cost that limits accessibility. Furthermore, forward-looking climate data are limited for transition risks while forward-looking metrics for physical risk data still remain a challenge, given that raw data items on biophysical impact and geospatial information are often unavailable. The report notes that further steps are urgently needed to improve the quality, availability, and comparability of climate-related data through increased reporting requirements, sector-based methodologies, technological innovation, and intensified cooperation among financial regulators, financial institutions, and non-financial sector stakeholders. This is why the NGFS work program for 2022-2024 sets out plans for the Workstream on bridging the data gaps to evolve into an internal data experts’ network following publication of this final report. The key policy recommendations follow and are closely linked with the “directory,” which will help in successful implementation of the recommendations going forward:

    • Increase availability of granular data on emissions and improve reliability of reported climate-related data
    • Intensify cooperation and coordination, foster the development of use cases in collaboration with the private sector, enhance the usability of statistical classifications, and increase linkage between taxonomies/classifications, disclosure, and data-related measures
    • Increase the harmonization of forward-looking metrics by improving the availability of asset-level geographical data, assessing the level of maturity of forward-looking metrics to design specific public and private cooperation to harmonize methodologies, and fostering partnerships

     

    Related Links

     

    Keywords: International, Banking, Insurance, Securities, Climate Change Risk, ESG, Sustainable Finance, Data Gaps, Disclosures, Taxonomy, Reporting, NGFS

    Featured Experts
    Related Articles
    News

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8424