This is the Open Data Institute (ODI) response to the UK government’s call for evidence on updating the Green Finance Strategy. For more information on any of the positions outlined below, you can contact the ODI’s Policy team at email@example.com.
We believe that a leading global centre for green finance is one in which investors can have confidence that their decisions about where to allocate capital are underpinned by trustworthy data on the environmental performance of potential investments. This requires the presence of a vibrant ecosystem of organisations providing data assurance products and services.
Data assurance is ‘the process, or set of processes, that increase confidence that data will meet a specific need, and that organisations collecting, accessing, using and sharing data are doing so in trustworthy ways’. These activities can help to ensure that:
- the right data is collected and shared, and that its collection and reporting follows appropriate standards
- organisational processes for reporting are compliant with legal and regulatory requirements and comparable across different companies and investment products
- decision-making processes adequately take into account and respond to the information created from data.
Business-to-business data assurance, including of environmental performance data, is an emerging sector in which rapid growth is expected over the coming years. Around 900 UK firms currently offer data assurance products and services, more than half of which have been incorporated in the last 10 years. The UK could become an international centre for excellence in data assurance, supporting the government’s wider economic and international ambitions.
However, we believe that governmental or regulatory intervention might be necessary to unlock the considerable economic opportunities associated with the growth of data assurance in green finance. This could include:
- developing clear definitions and standards, including by requiring consistent mandatory reporting standards for firms and investment products and encouraging the adoption of open, interoperable data standards for environmental performance data
- driving and directing the growth of data assurance by taking steps to stimulate demand and regulating to ensure the services provided are of the requisite quality
- future-proofing data assurance by conducting or commissioning research into trends such as the increasing use of alt data and AI systems in producing disclosures, and the role of data institutions in stewarding environmental performance data.
The ODI is actively working to expand our knowledge of data assurance as an emerging practice. For more detail on the areas examined in this evidence submission, please refer to our publication Tackling greenwashing through data assurance.