COP27 and Beyond: UK Sustainable Finance Rules | UK Finance Regulatory Roadmap Series IV

3 min read

FullCircl Commentary:
COP27 and Beyond: UK Sustainable Finance Rules

UK Finance has brought back its popular Regulatory Roadmap webinar series. We joined live to bring you all the highlights on the key topics and issues impacting UK B2B financial institutions. 

Read on as we dig into their webinar, COP27 and Beyond: UK Sustainable Finance Rules. 

The global sustainability landscape has been tumultuous since COP26 in the autumn of 2021. And yet, it’s been a busy year for Environmental, Social and Governance (ESG) regulation both in the UK and globally, with lots of progress made to move the agenda forward on key areas such as the transition to a net zero economy, embedding ESG across all regulatory functions (not just policy, but also holding organisations to account through enforcement), and the package of measures to address the rise of ‘Greenwashing’.

But the thing that stood out to us during the discussion was that there is still not enough reliable data disclosure and that this is a significant problem for banks and financial institutions when it comes to risk management, compliance, and the opportunity to take the lead in accelerating progress amongst clients, as well as achieving their own ESG ambitions.

The ESG data gap

Incorporating ESG metrics into investments, product and service development, due diligence, and KYC decision-making is an important way to mitigate risks, protect reputations, improve customer perceptions, generate long-term growth, and, as the panel pointed out, protect from the risk of litigation.

There is rapid development of disclosure requirements and moves towards standardisation of ESG reporting requirements, as well as increasing numbers of companies proactively publishing ESG progress reports. However, the quality, comparability, and coverage of data is still inconsistent, lacks transparency, and creates significant difficulties for banks and financial institutions when it comes to scrutinising the integrity of client commitments and monitoring progress toward targets.

How to address the imperfect data challenge?

With the regulatory landscape evolving at pace, banks and financial institutions cannot shy away from tackling the gaps in availability and consistency of ESG data.

As a member of the panel pointed out, financial institutions not only need robust and transparent data that can be tracked, but they also need to identify patterns in that data to make up for gaps and inconsistencies - including identifying potential ‘Greenwashing’. But for many, especially the smaller organisations, this seems like a daunting and expensive task.

Hence why many still don’t have a centralised ability to collect and analyse ESG data.

ESG data takes many forms and can be found in many places (internal, external, structured, and unstructured). It is highly dynamic, making it hard to keep up let alone analyse and react to, and finally, because ESG data is big data and analysing it is a huge undertaking.

One of the panelists rightly pointed out that to date there is no overarching ESG solution for banks, financial institution or other businesses, and so innovative data providers are picking up the slack when it comes to addressing the imperfect data challenge.

How is FullCircl bridging the ESG data gap?

Our Customer Lifecycle Intelligence (CLI) platform is helping banks and financial institutions evaluate ESG related risks and opportunities.

FullCircl’s Business Information Graph (B.I.G)™ ingests billions of data points every day from a multitude of official and third-party sources.  We match and enrich this information to unlock the most accurate and contextualised view of every business in the UK and Ireland – giving our users an up-to-the-minute view of what they need to know about an organisation, large or small, for:

  • Prospecting - Grow new business by identifying sustainable sectors and organisations that meet ESG criteria.
  • Due diligence, KYC, and Onboarding – effectively determine and measure the ESG footprint of companies.
  • Green finance – identify green and sustainable projects and companies for new investment opportunities.
  • Product and service development - respond to consumer demand for sustainability-driven investment products.
  • Stay ahead of regulatory and compliance requirements – monitor and respond quickly to regulatory and reporting changes.

We can help you get ahead of the new regulatory landscape. Contact a member of our team today to understand how we align with your sustainable finance agenda. 

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