ESG with OS-Climate

[ffionwiggins]

OS-Climate are progressing with key deliverables and are keen to explore where Financial Objects can help define data standards for reference in the wider work

Description of Problem:

OS-Climate have completed a 90 day roadmap compiling and aggregating data and creating visualisation tools for key climate metrics. As their work progresses there will be specific data sets that will benefit from standards models and they will share these with us in the coming weeks

Potential Solutions:

More details to follow. IF ESG and Climate Data is of interest to you please join the conversation and put forward ideas so we can track convergence on topics.

[troups]

@ffionwiggins - can you expand this topic, there are a few dimensions to ESG, say....

1 ESG measures and ratings as a data product (MSCI, Sustainalytics etc etc) 2 Expressing and traversing corporate hierarchies (operating, financing entities and how ratings are applied) 3 Reporting, including the accounting standards (SASB) 4 Specific use cases, say trading and execution vs portfolio construction vs compliance

Even given all of the above, we need to consider if ESG is special at all (other than the urgency of getting ESG into the investing process!!!). Meaning that really its just another data set layered onto corporate hierarchies..... The challenge with ESG data is often the complexity of cascading up and down the tree rather than the data itself which is similar to other ratings data sets.

[ffionwiggins]

Thanks @troups - definitely aware there are many facets to ESG and the challenges people are facing/want to solve. More than happy for us to discuss each of these as independent items to gauge participant interest.

[ffionwiggins]

Input from Itau on potential topics

• Reporting – Sustainability Accounting – As of today there are a few frameworks and standards used for ESG Disclosure: TCFD, SASB, GRI, IIRC, etc. Each have its own focus but they are complimentary. Some are industry specific whereas some are not. There are working groups in place to discuss reporting (e.g. UNEPFI) but it is not industry specific.
• Extreme Events Data – Our sustainability team shared that there isn’t a consolidated database on extreme events. It could be a regional problems, but it is something we lack at least for Brazil. It is somewhat connected to the next topic.
• Data aggregation and normalization – It would be interesting to have public data sourced and aggregated. In the past, we did talk to OS-Climate and FINOS had connected us with them, we there was no traction internally for in order to participate one had to become a member.
• Related to Carbon Credits there is an initiative called TSVCM (https://www.iif.com/tsvcm) that is implementing a governance body (ICVCM) in order to define a standard for Carbon Credits (CCP) in order to bring liquidity, quality and transparency for the whole voluntary carbon markets. As of today, there are several standards globally accepted (e.g. Verra, Gold Standard, American Carbon Registry) and the CCP aims at bringing comparability, fungibility and guidelines. Not sure if there is interest within the group to discuss about carbon credits. In addition, Itaú is currently involved in a Carbon Credit initiative called Carbonplace, which is a platform for carbon credit for trading and settlement (https://carbonplace.com). There are no Open Source components to the Carbonplace platform but happy to talk about it.

[troups]

@ffionwiggins tks for bumping the ESG topic!! Looking forward to the call tomorrow

rgds the above (Extreme Events Data) - this is an open data problem, the open data institute have a lot of folks doing great work in climate resilience, might be worth getting them involved, perhaps ordinance survey who have done a lot of good open data work.

On carbon credits we may have some experience in Southampton Business School, another enterprise fellow is engaged with some large financials on that topic, happy to help drive that conversation forward, this is exactly the finance/tech crossover work we plan to contribute to. Our resident expert is Chris McHugh (ex HSBC). https://www.southampton.ac.uk/business-school/about/staff/cam1v21.page?