Swift progress needed on disclosures, global taxonomy, and transparent and quality-assured metrics, NGFS says.
The Network for Greening the Financial System (NGFS) has published a progress report on its work to identify the barriers to obtaining reliable and comparable climate-related data.
“Reliable and comparable climate-related data are indeed crucial for financial sector stakeholders to assess financial stability risks, properly price and manage climate-related risks, and take advantage of the opportunities arising from the transition to a low-carbon economy,” said the NGFS, which represents central banks and prudential financial regulators globally.
“However, persistent gaps in climate-related data hinder the achievement of these objectives.”
The report identifies a need for:
- more forward-looking data (e.g. targets or emissions pathways)
- granular data (e.g. geographical data at entity and asset-levels)
- assurance about the quality of climate-related data through verification and audit mechanisms
- improvements in data accessibility
It outlines three ‘building blocks’ where policy intervention is needed to bridge the data gaps, namely:
- a rapid convergence towards a common and consistent set of global disclosure standards
- efforts towards a minimally accepted global taxonomy
- the development and transparent use of well-defined and decision-useful metrics, certification labels and methodological standards
The NGFS says it will continue to identify the most prevalent data gaps, engage with stakeholders, and issue recommendations on how to bridge the gaps.
The report, available here, will serve as an input to the work on climate-related data undertaken at the international level by the FSB (Financial Stability Board) and the G20.