Canada has a sustainability data problem. Until it’s solved, financial institutions will struggle to efficiently allocate capital in support of the country’s climate transition.
That’s the conclusion of a new report out of Queen’s University’s Institute for Sustainable Finance (ISF), a network of professionals from across academia, the private sector, and government.
The institute said the results show there is “room for improvement” when it comes to the “quality, usability, and the amount of sustainability data available.” It also found that a large percentage of the report’s respondents were unsatisfied with Canada’s existing data.
For the report, the ISF polled researchers, investment professionals, and academics to understand Canada’s sustainability data landscape. Out of 84 respondents, just 6% said they were “very satisfied” with the availability of sustainability data. Almost half said they were either “not very satisfied” or “totally dissatisfied” with data availability.
The ISF further found that there is an appetite for more sustainability data across Canada, with 41% of respondents saying obtaining additional data is a top priority.
Alongside availability issues, many respondents voiced frustrations over gaps and errors in existing sustainability data. More than one-third of respondents said “missing values” or “incomplete information” are the top issues they grapple with. Difficulties accessing data and problems with data formatting polled highly, too.
The ISF’s findings dovetail with an analysis of Manifest Climate’s own industry-leading database of climate disclosures, which surfaces the quality of organizations’ climate actions, as well as their readiness to tackle climate risks and maximize climate opportunities. We found that 30% of organizations in our database have no disclosure on a process to report climate-related issues to management, which suggests that critical sustainability data may not be getting to the decision-makers who matter most.
New regulatory initiatives have the potential to improve access to sustainability data and fill the gaps in existing databases. The Canadian Securities Administrators have proposed mandatory climate-related disclosures for public companies, based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), the world’s leading framework for reporting climate risks and opportunities. Recently, Canada’s Office of the Superintendent of Financial Institutions (OSFI) also said it would introduce binding climate disclosure and risk management requirements for federally regulated financial firms.
These efforts should increase the volume of sustainability data, but there’s no guarantee it will make it more decision-useful. That’s where Manifest Climate comes in. Our software-as-a-service (SaaS) platform is designed to improve our clients’ access to top-quality sustainability data and surface meaningful insights that can help them build climate resilience. The platform is already being used by some of the world’s largest financial, insurance, endowments and asset management organizations, as well as real estate, mining, technology, and packaged goods companies across North America, Europe, and beyond.
Manifest Climate is hosting a webinar on OSFI’s announcement with Julie Segal, senior program manager, climate finance at Environmental Defence Canada, and Nezihe Aquino, chief risk officer at VanCity, on July 6. The webinar will explore OSFI’s guidance and how firms can prepare.