Challenges with Data & Banking
During The Economist’s “Week Insight Hour” session on the “Green Industrial Revolution”, four experts gathered to discuss sustainability issues in the UK. The shared conclusion between them was that there is an increase in collaboration within the value chain. However, consistent effort is still needed from all sectors to collectively achieve sustainability goals.
Rasmus Valanko, managing director of We Mean Business, a global climate change network, discussed the challenges of acquiring accurate data to deal with sustainability issues. "It's like the wild-west in terms of data," he said, referring to the way businesses are still unsure of the kind of data they need, how they can get hold of it, and how they can utilize it to propel their sustainability initiatives forward. This is especially true for measuring carbon scope 3, which contributes a large portion of total emissions—including upstream and downstream emissions of the organization's activities and other indirect emissions.
However, Valanko also shed light upon how businesses should start immediate action instead of waiting on usable data before actions are taken against this urgent issue. It is often easier to identify the hot spots in value chains (the ones with the most emissions) and start there. He advised against using the lack of data as an excuse, as waiting for the perfect data will be ineffectual.
BANKING AND FINANCE
For financial institutions, the challenge is adjusting policies to facilitate the transition into more sustainable innovations. Robert King, head of sustainable finance at HSBC, has voiced that it is time for banks to challenge themselves more in this regard, as there is no time to keep studying the risks of all these new technologies. Different types of risk profiles then apply to clients looking for sustainable finance. Banks must reach a consensus on measuring risk in this new era before innovations that would otherwise help the world transition into a more sustainable future are funded
The challenges of data collection, usage, banking, and finance have been a common theme among many recent conference talks. A practical solution has yet to be found, but the good news is that there are always ways we can start making progress.
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