| 14.02.2020

Hanken together with the Finnish financial sector calls for an open ESG data register in EU

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A standardized and open ESG data register would facilitate the increasing ESG-informed decision-making and sustainable investments worth up to 260 billion euros annually at EU level only.

Hanken together with the Finnish financial sector redommends the EU to take a leading role in the development of an open ESG (Environmental, Social, Governance) data register by standardizing companies’ ESG reporting. Harmonized, comparable and open information of companies’ ESG performance would benefit all participants in the economy: financial markets, academic world, and other parties. Unified and measurable data for ESG is needed to make sure all stakeholders have the accurate information on how companies are working towards combatting climate change to make a better world.

Standardized and open data needed for an impactful public EU ESG data register

Currently, the biggest challenges regarding ESG  data is the lack of comparability, the high costs of ESG data and the subsequent unaffordability of the data to smaller investors.

“A standardized and open ESG data register would facilitate the increasing ESG-informed decision-making and sustainable investments worth up to 260 billion euros annually at EU level only. The future EU taxonomy could be integrated into the register as well, so that investors could directly identify eligible investments and compare companies’ activities based on the taxonomy’s criteria”, says Minna Martikainen, Dean of Educational Cooperation at Hanken School of Economics.

The forthcoming regulation, EU Sustainable Finance Action Plan, is expected to have significant effects on the financial markets. It aims to reorient capital flows towards sustainable investments, manage financial risks stemming from climate change and foster transparency and long-term perspective in financial and economic activity. In practice, this means stronger requirements for companies and investors to disclose information and better ESG  information to their stakeholders.

Accessible ESG raw data crucial for advancing sustainable development research and actions

Once ESG data needs to be reported by companies, it should be registered and made publicly available for scientific purposes alike traditional financial statements. This would lead to lower cost and accessibility of the ESG raw data especially for the educational and research community. It would boost the financial sector’s learning and development ability related to sustainable finance.

“The financial sector is eagerly looking for investments that perform well in ESG factors. Increased ESG transparency and data accessibility has potential to boost the competitiveness of the European companies and financial institutions globally”, says Martikainen.

 

Hanken together with the Finnish financial sector propose that the harmonization of companies’ ESG reporting should be part of the objectives of the upcoming review of the Non-financial Reporting Directive.

“The Finnish financial sector’s proposals for the advancement of ESG data reporting and management in the EU” -initiative is a joint effort signed by Hanken, Aalto University, Finance Finland, OP Group & Aktia Bank.

Contact: Minna Martikainen (minna.martikainen@hanken.fi) & Hanna Silvola (hanna.silvola@hanken.fi)