Strategic Focus: Climate And ESG Disclosures For Financial Institutions
16 Oct, 2023
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Executive Summary
Financial institutions – which for the purposes of this report encompass banks, private equity firms and insurers – are playing a critical part in the transition to a low-carbon economy. Given the importance of their role, these firms are coming under new regulatory pressures, aimed at preventing greenwashing and bringing transparency to ESG and sustainability claims. This report provides sustainability and ESG leaders at financial service firms with insights into how to adapt and enhance their internal processes and information systems to enable better decision-making and mitigate the risk of regulatory non-compliance.
Financial institutions are facing greater ESG and climate disclosure requirements
Disclosure requirements can be organized into four broad categories
Complex disclosure challenges are compounded by political tensions surrounding ESG
Firms must broaden their digital capabilities to overcome reporting challenges
Disclosure requirements can be organized into four broad categories
Complex disclosure challenges are compounded by political tensions surrounding ESG
Firms must broaden their digital capabilities to overcome reporting challenges
Figure 1. Reporting frameworks influencing corporate ESG and sustainability spend
Figure 2. Climate-related disclosures
Figure 3. ESG and sustainability disclosures
Figure 4. Fund classification regulations
Figure 5. Supply chain disclosure regulations
Figure 6. Most significant challenges for ESG and sustainability performance improvements
Figure 7. Importance of data from internal applications for ESG reporting and sustainability performance
Figure 8. Most important software characteristics for financial service firms
Figure 2. Climate-related disclosures
Figure 3. ESG and sustainability disclosures
Figure 4. Fund classification regulations
Figure 5. Supply chain disclosure regulations
Figure 6. Most significant challenges for ESG and sustainability performance improvements
Figure 7. Importance of data from internal applications for ESG reporting and sustainability performance
Figure 8. Most important software characteristics for financial service firms
JP Morgan Asset Management, Task Force on Climate-related Financial Disclosures (TCFD), EY, Position Green, KPMG, 3Degrees, European Financial Reporting Advisory Group (EFRAG), Partnership for Carbon Accounting Financials (PCAF), Jupiter Intelligence, Allianz, International Sustainability Standards Board (ISSB), Network for Greening the Financial System (NGFS), Google, BuildESG, Willis Towers Watson (WTW), European Commission, SLR Consulting, Private Funds CFO, WSP, CVC Capital Partners, Sweep, UN Net-Zero Insurance Alliance (NZIA), Novata, ERM, ESG Playbook, European Parliament , MESA Group, 2° Investing Initiative (2DDII), Sustainability Accounting Standards Board (SASB), Persefoni, US Securities and Exchange Commission (SEC), Deloitte, MSCI, PwC
About the Authors
Luke Gowland
Senior Analyst
Luke is a Senior Analyst at Verdantix, specializing in ESG and sustainability reporting software and financial ESG. He advises both technology buyers and software vendor and s…
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Kim Knickle
Research Director
Kim Knickle is a Research Director at Verdantix, bringing more than two decades of analyst experience to the evolving world of sustainability. Her current research spans ESG a…
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