Investors and service providers including Allianz and S&P Global have teamed up to tackle the lack of standardised climate data and analytics by developing a “non-competitive” platform to share information.
The platform, named OS-Climate, will house climate datasets and analytics identified as the most material for investors, and will be available for use by the wider market at no additional cost.
It is the result of a project that has already seen backing from big hitters including former UN climate chief Christiana Figueres, who supported the initial development of the platform. Bob Litterman, ex- head of risk at Goldman Sachs, is part of the OS-Climate Planning Team, along with Hewson Baltzell, co-founder of what is now MSCI ESG Research (previously Innovest).
Data points being considered for the platform include corporate metrics such as sales breakdowns, company-level emissions and climate-related targets; policy and regulation by jurisdiction; and data related to physical climate risk and technological innovation.
OS-Climate will also focus on the resilience of portfolios to climate risks by offering scenario modelling capabilities. Users will have access to scenario analysis based on macroeconomic and sectoral climate risk, as well as “bottom up” asset-level risk.
OS-Climate is ‘open source’ and community-based: the costs and resources required to build the platform are shared among its partners, who pay annual fees with varying governance and licensing rights attached. They can then leverage the platform resources to develop commercial offerings. The collaboration is based on a model developed by the not-for-profit Linux Foundation.
Partners, who are represented by a Board of Governors, will also have a say in the strategic direction and priorities of the platform. The group is considering making board voting positions available to non-fee paying NGOs and academic organisations.
According to OS-Climate organisers, while many organisations “have developed key pieces” of climate-related investment analysis, the costs of developing a comprehensive range of tools “are too great for any firm to handle alone”.
To date, Allianz has signed on to contribute its in-house datasets, while physical risk analytics, top-down and bottom-up scenario modelling will be provided by Jupiter Intelligence, Ortec Finance and Entelligent, respectively. The platform will also incorporate the Inevitable Policy Response, a set of climate transition scenarios developed by the PRI.
OS-Climate is currently in talks with S&P Global and other data providers on further contributions to the platform.
According to presentation materials seen by RI, the group has approached a number of investors to participate including Alberta Investment Management Corporation, British Columbia Investment Management, Australian Super, APG Asset Management, AXA Investment Management, Invesco and Hermes Investment Management.
Once the groups membership and funding reach critical mass, anticipated by the summer, it will launch an initial “kernel” version of the platform.
The development of OS-Climate comes amid a number of other market-led initiatives to address the quality of climate data and analytics. Recently, BlackRock, in partnership with Microsoft, put out a call for collaborators to leverage “big data, machine learning and AI” to improve sustainability data.
There is also the Paris Agreement Capital Transition Assessment, a scenario analysis tool developed by climate think tank 2 Degrees Investing Initiative (2dii), and the EU-backed Climate Tech Compass, an open source tool which identifies sector alignment with national Paris-aligned carbon budgets, launched recently by 2dii and Beyond Ratings.