Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance. The Innovation Hub and the Italian G20 Presidency have published problem statements to identify challenges in data collection, verification, and sharing; analyze and assess physical and transition climate risks; and connect projects and investors. The closing date for applications is May 31, 2021. The shortlisted teams will be announced on June 14, 2021 and invited to showcase their prototypes at a workshop in August 2021 for feedback from national authorities and experts. Winners will be announced in October 2021.
The BIS Innovation Hub, through its Singapore Center, and the Italian G20 Presidency have published three high-priority operational problems and invited private firms to develop innovative technological solutions. The problem statements identify the following challenges, highlighted by submissions from G20 finance ministries and central banks:
- Data collection, verification, and sharing. A perception of information asymmetry exists in the collection and sharing of environmental data to support environmental risk analysis. This stems from lack of consistent data methods and disclosure regimes, along with a limited verification of self-reported returns that negatively affect confidence in the reliability of aggregated data sets. In this context, the problem statement questions whether technological solutions contribute to a disclosure ecosystem that supports all stakeholders while reducing the disclosure workload and costs for corporates and other reporting entities and respecting data privacy policies in individual countries. It also raises a question whether technological solutions are deployed to aid in better capturing and structuring relevant climate-related (meta)data digitally, including through a "rulebook" that showcases how rules and data requirements can be delivered as code in a consistent, high quality, transparent, comparable, and standardized way, to enhance environmental risk analysis.
- Analysis and assessment of physical and transition risks. One of the main difficulties facing non-financial corporations and financial corporations alike is the ability to accurately predict the vulnerabilities associated with transition and physical risks posed by climate change. As the world transitions toward climate-neutrality, there is a need to support institutions and relevant stakeholders with tools enabling them to visualize, predict, assess, and monitor transition and physical risks. The problem statement questions whether big data ingestion, predictive analytics, and visualization tools can be developed to aid both regulators and institutions/corporates to better assess and analyze these risks across different regions, sectors, and asset classes.
- Improvement in connecting projects and investors. The problem statement questions whether technological solutions help connect projects and investors to scale up their impact in a secure way while respecting data privacy policies in individual countries. It further raises a question related to whether technological solutions also be used to effectively track platform performance and outcomes in terms of volume and quality of credit allocation and environmental impact and be deployable across geographies and different states of development.
Interested participants can compete and develop innovative solutions to address these problems using a dedicated platform, through which Codemotion will facilitate registration and online judging of project proposals, and the IBM Cloud for prototype building. An independent expert panel organized and sponsored by the Bank of Italy will judge the submissions and identify the most promising solutions.
Keywords: International, Europe, Italy, Banking, Climate Change Risk, Sustainable Finance, Reporting, Disclosures, Fintech, Regtech, Techsprint, G20, Innovation Hub, BDI, BIS
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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