New Initiative to Streamline Climate Data Will Transform Compliance & Investment Decision Making

CHATHAM HOUSE, LONDON / AGILITYPR.NEWS / April 26, 2022 / FOR IMMEDIATE RELEASE:

New Initiative to Streamline Climate Data Will Transform Compliance & Investment Decision Making

CHATHAM HOUSE, LONDON (April 26, 2022) - A new Digitization Sustainability Data Lab (DSD Lab) will bring together multiple national regulators and climate disclosure mandates in one manner for the first time, it was announced today.

The initiative will better address global warming, protect investors, public interest and significantly reduce compliance costs, partners XBRL International, EDM Council, Capitals Coalition, and CIFF (Children’s Investment Fund Foundation) say.

The data lab and global blueprint will help align climate disclosure mandates from over 100 countries, helping regulators and standard setters bridge the gap between net zero commitments and the global economy.

Climate disclosure costs for companies worldwide could currently account for more than $10.2 billion, according to the U.S Securities and Exchange Commission but efforts to standardize technologies and data could help reduce these costs and expedite effective climate warming mitigation.

During the “Digital Transformation of Sustainability Information is Now Underway Workshop” at Chatham House, three major announcements were made:

·      Creation of a ground-breaking global baseline of sustainability-related disclosure standards which will result in agreed ESG/climate data metrics and methodologies. The taxonomy initiative led by XBRL International has involved the creation of a new special interest group (SIG) made up of regulators and standard setters -uniquely bringing together the International Financial Reporting Standards Foundation (IFRSF), the International Sustainability Standards Board (ISSB) and European Financial Reporting Advisory Group (EFRAG).

·      Creation of standard compliance guidelines for global data comparison using freely available, open-sourced technologies to improve better decision making and solutions to address global warming.

·      Money saved from the new standards and guidelines to be redirected from compliance infrastructure to address climate change worldwide - including supporting developing nations that require priority or small to medium sized entities’ (SMEs) compliance solutions using cost-effective global standardized applications.

"New climate and ESG reporting mandates across the world are an unrivalled lever for change, said John Turner, chief executive officer of XBRL International. “This new reporting drumbeat will be a key part of the global transition to decarbonise economies. It is vital that these new disclosures are as comparable as possible and that they are subject to independent assurance to ensure quality. To be relevant at all in the 2020s they need to be digital, expressed using the proven XBRL digitisation standards now in use by millions of companies reporting under more than 190 existing regulatory mandates. We are delighted with the collaboration achieved thus far with major sustainability standards setters and regulators on this topic and look forward to a wider set of co-operation within a global platform that will provide support for consistent, high quality and highly usable ESG digital reporting around the world."

“Harmonizing data sets through the proactive and collaborative work that we are doing is a major step forward in alleviating the challenges and disconnect that has been associated with sustainability data management,” said John Bottega, president of EDM Council. “By deploying a comprehensive framework of best practices and controlled vocabulary that leads to a more efficient data lifecycle, this multi-party effort will go a long way in reducing costs and breaking down silos associated with ESG data capture."

“The flow of data is one of the biggest barriers to better decision-making, and the radical collaboration developed through the Digitalization for Sustainability Data project is essential to overcoming it. The creation of a global data lab will help improve the flow of data, that is useful and relevant and will serve business, investor and public interest needs,” said Mark Gough, chief executive officer of the Capitals Coalition.

“To achieve the goals of the Paris Agreement, global investment in clean and transition technologies must rise from less than $1trillion per year currently, to $4trillion per year before 2030, said Michael Hugman, director of climate finance, Children’s Investment Fund Foundation (CIFF). “Businesses, investors, regulators and policy makers urgently require comparable, digitised climate and sustainability data to make the thousands of strategic and investment decisions which will drive the essential capital shifts needed to respond to the climate crisis. Today’s announcements - and the ongoing collaboration of key stakeholders in the corporate standards and data arena – take us another step closer to making this a reality.”

"Key for success is committing to actively collaborate towards an agreed global digitized data management structure for sustainability, treating sustainability data with the same or better control, governance, transparency and assurances as that of financial statement data disclosures by directly linking to a thriving $30 trillion sustainability investment marketplace,” said David Wray, co-founder of the Digitization Sustainability Lab (DSD Lab) initiative.

"In order to accelerate low carbon transition, we need to make sure that the data and information flow enables sound investment decisions so commitments can transform into implementation,” said Ana Yang, Executive Director, Chatham House Sustainability Accelerator. “Harnessing both the digitalization wave and sustainability disclosure drive, we can shake up both the hard and soft infrastructure to minimise the transaction cost and help unlock investment to low carbon projects in real economy and on the ground. This will be the beginning of a transformation that can move stakeholders across the data and disclosure supply chain towards more material, meaningful and more simplified data and processes."

About XBRL International

XBRL International is a global, not-for-profit consortium working through the XBRL Standard to improve business reporting for the public good. We are a member supported organisation, with dedicated volunteers from all over the world offering their time and expertise to develop specifications to support the collection, sharing and use of structured data for data reporting and analysis.

About EDM Council

EDM Council is the global association created to elevate the practice of data management and analytics as a business and operational priority. The Council is the leading global advocate for the development and implementation of data standards, best practices, and comprehensive training and certification programs. With more than 300 member organizations globally from the Americas, EMEA, and Asia, and more than 10,000 data management professionals as members, EDM Council provides a venue for data professionals to interact, communicate, and collaborate on the challenges and advances in data management and analytics as critical organizational functions. For more, visit edmcouncil.org and follow us on LinkedIn and Twitter.

About The Capitals Coalition

The Capitals Coalition develops, advocates for and advances the capitals approach. We work with organizations and individuals spanning global systems to understand the value that flows from the capitals and to ensure that it is included in decision-making. For more, visit https://capitalscoalition.org/project/digitalizing-sustainability-data/

About the Digitization Sustainability Data Lab

The DSD Lab’s mission is to design approaches to climate disclosure data tagging to provide the same access to information in a digital format regardless of location creating a common data hub that standardizes information that creates a global access and using freely available, open data formats. 

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