Finding value in the data web of sustainable finance.

While environmental, social and corporate governance considerations have always been a matter of importance for financial institutions, there is now greater scrutiny than ever of the ESG impact of assets, investments and lending.

The adoption of United Nations’ 17 Sustainable Development Goals (SDGs) in 2015 formed a framework for sustainability in the global economy, setting out aims to reduce poverty and hunger, promote good health, wellbeing and education and protect biodiversity and the climate.

SDGs do however present complexities given their wide scope and the difficulties in addressing them in equal measure. Additionally, new and different public pressures can develop such that the priorities of businesses and economies are forced to pivot as the global backdrop does.

It has been commonplace in recent years, for example, for the World Health Organisation to label climate change the greatest risk to human health around the world. This now seems a debatable summation given the events of 2020, and it is likely that the threat of pandemics and poor health will receive greater attention in the years ahead.

The benefits for financial institutions of undertaking ESG-driven activity are well understood but remain clouded in uncertainty due to unknown risk and reward. They, therefore, need practical solutions to work to sustainable goals that can help to bring returns while also delivering positive environmental and social impact.

Initiatives that enable this are emerging in the worlds of innovation and technology that harness the data that financial institutions have at their disposal to deliver additional value for clients and stay relevant in a constantly evolving space.

However, there remain many unanswered questions about the standardisation of data to make it digestible for firms across the industry, how the user experience of reported data can be transformed to improve knowledge of risks and opportunities and what role technologies such as AI and blockchain can play.

This report sets out to answer those questions. Finextra Research has combined opinions and commentary from sustainability experts at Citi, Standard Chartered, BNY Mellon, Moody’s, HSBC, Latham & Watkins, Tandem Bank, and BBVA with original insights and analysis to explore the tools and processes that can assist organisations in developing their ESG offering and driving growth through meeting sustainable goals in the years ahead.

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