News and resources on ESG data and technology, Impact Investing and Sustainable Finance initiatives and best practices.

FCA to run second phase of digital sandbox pilot with a focus on ESG

Source: FCA

We're running a second phase of the Digital Sandbox with The City of London Corporation, to support the testing and development of new products and services in the area of environmental, social, and governance (ESG) data and disclosure.

Applications to take part are now open.

Earlier this year, 28 organisations took part in the first Digital Sandbox pilot, with participating teams presenting the solutions they had developed at a series of demonstration days.

We published an evaluation report setting out the findings of the pilot, including how it accelerated the development of innovative products and solutions within financial services, as well as key lessons learned from the pilot phase.
Sustainability cohort - ESG Data and Disclosure

Building on the lessons learned from the pilot, we will run a second phase of the initiative focused on providing support to innovators looking to develop and validate solutions in the area of ESG data and disclosure.

The purpose of this sustainability cohort is to accelerate innovation and to address the specific market challenges set out below:

How can technology enable transparency in disclosure and reporting on sustainability, especially on the characteristics of corporate assets and the profile of their supply chains? (eg open source and eco-friendly decentralised ledgers, centralised platforms)
How can technology be used to automate the assurance of a listed issuer’s ESG data and validation of its ESG-labelled corporate bond issuance? (eg Internet of things, decentralised ledgers, centralised platforms, satellite imaging, artificial intelligence)
How can technology help consumers understand the ESG characteristics of the products and providers they engage with, as well as provide visibility around alternatives aligned with their needs and preferences?

How to get involved
Apply to develop your solution in the Digital Sandbox

We’re looking for innovative individuals or firms that would benefit from access to the Digital Sandbox to develop and demonstrate the value of their solutions.

Applications for the Digital Sandbox sustainability cohort are now open until 11 October 2021. You can submit an application via the online application form by registering on the Digital Sandbox platform. We will contact applicants in November to let them know the outcome of their application.

Applications will be assessed on the following eligibility criteria:

Genuine innovation: The solution/product is sufficiently different from what already exists in the market.
In scope: The solution would benefit UK consumers or financial services firms by solving one of the ESG data and disclosure use cases. Your company doesn’t need to be domiciled in the UK, but your solution needs to be intended for use in the UK market.
Need for a Digital Sandbox: The solution requires Digital Sandbox features to be developed or improved.
Credible testing plan: The application has proposed a well-designed testing plan, detailing success criteria and future steps.

Register to collaborate with the cohort and wider ecosystem

Industry engagement and involvement will be key to the success of this initiative. We are seeking input from organisations with an interest in the topic of ESG data and disclosures to form part of the Digital Sandbox eco-system during this second phase. This includes:

established market players
potential end-consumers of the products being developed
sustainability experts
others who may be able to provide mentorship, guidance and expertise to the participating firms

For more information, email digital.sandbox@fca.org.uk.
Provide data assistance

We are also seeking guidance from data experts in identifying useful real data or creating synthetic data sets for the participants to test and train their models.

If you're interested in finding out more, please contact digital.sandbox@fca.org.uk.
Expert Advisory Panel

We will jointly assess applications for the sustainability cohort with The City of London Corporation, with input provided by an Expert Advisory Panel consisting of:

Centre for Greening Finance and Investment
Innovate Finance
Investment Association
Tech Nation
UK Finance
UK Sustainable Investment and Finance Association

Digital Sandbox pilot features

The following features are the foundations of the Digital Sandbox pilots:

Access to synthetic and publicly available data assets to enable testing, training and validation of prototype technology solutions.
An application programming interface (API) market-place where digital service providers list and provide access to services via APIs.
An integrated development environment, in which applicants can develop and test their solution.
A collaboration platform, to facilitate an ecosystem of key organisations that will provide support and input to digital sandbox participants, such as incumbents, academia, government bodies, venture capital, and charities.
An observation deck, to enable regulators and other interested parties to observe in-flight testing at a technical level, to inform policy thinking in a safeguarded environment.

Comments: (0)