Lack of data on biophysical impact, emissions and geospatial impacting investment and lending decisions and exposure quantification.
The Network for Greening the Financial System (NGFS) has released its final report on bridging data gaps, providing policy recommendations for improving the availability, quality and comparability of climate-related data to support the transition to a greener global economy.
The final report follows a progress report on bridging data gaps, issued in May 2021, which laid the groundwork for a comprehensive assessment of climate-related data needs, availability and gaps, and identified three building blocks needed to ensure the availability of reliable and comparable climate-related data.
In the final report, the NGFS says relevant climate-related data is either not available, lacks the appropriate granularity, cannot be verified, or is of poor quality. In other cases, available data sources cannot be compared or are not consistent. In addition, uncertainties related to evolving climate-related data needs “make it difficult to draw definitive conclusions on the data gaps”.
The report provides specific NGFS policy recommendations for improving the availability, quality, and comparability of climate-related data. These include:
- Recommendation 1: Foster convergence towards a common and consistent set of global disclosure standards
- Recommendation 2: Increase efforts towards mutually shared and operationalised principles for taxonomies and sustainable finance classifications
- Recommendation 3: Developing well-defined and decision-useful metrics, and methodological standards
- Recommendation 4: Better leveraging available data sources, approaches and tools
The NGFS has also been working on finalising a directory to provide a “living catalogue” of available climate-related data sources for financial sector stakeholders to use. The directory references 329 unique metric/methodology combinations, 1,262 raw data items and 748 links to data sources based on the needs of financial sector-stakeholder use cases.
The content of the final version can be used to draw evidence-based conclusions on the main climate-related data gaps and highlight key challenges to close such gaps, the NGFS says. Based on the directory, the largest gaps are for biophysical impact, emissions and geospatial data types – which affect use cases such as investment and lending decisions and exposure quantification.
The directory points to a number of key challenges to closing climate data gaps, including those related to auditability, the lack of relevant benchmarks, reliance on estimations and modelling, and granularity issues – to name a few.
The NGFS sees the directory as a public good, a “living tool aimed at fostering better dissemination of climate-related data” and “offering a practical solution to bridge climate-related data gaps”.
Based on feedback on the directory, the NGFS is currently working to develop a new website and to identify a possible long-term solution for housing and updating the directory.