(Updated to include 2 Degrees Investing Initiative)
Oxford University’s Smith School of Enterprise and Environment is pushing for a new asset-level data initiative to help investors assess climate-related risks. The initiative is in the process of being developed in partnership with Stanford University and environmental data group CDP and Paris-based 2 Degrees Investing Initiative among others.
The organisations are seeking to create a platform through which asset-level data about companies can be collected and publicly disclosed, in a bid to bolster more granular analysis of environmental risks.
“The way most investors measure environmental risks and opportunities today is by looking at carbon footprints and carbon intensity at the parent company level,” explained Ben Caldecott, director of the Sustainable Finance Programme at Oxford’s Smith School. “They use voluntary disclosure and estimated data to understand that, and we think that’s a really bad way of evaluating companies’ exposure to environmental risk and opportunity because they’re using company-level carbon emissions as a proxy for a whole bunch of factors that should be measured independently, but can’t because of a lack of asset-level data.”
Broader risks include technological developments, climate-related weather events and regulatory change, he said. The data would not be collected exclusively through voluntary disclosure: the initiative is instead proposing that much of the information could be secured by the organisations involved, using methods such as satellite imagery, existing reporting, and assessment of the characteristics of a company’s assets – such as location and technology.“We need to have good quality, asset-level information, tied to ownership information, and we need that to be available across key sectors and markets. That information resides in different places and in different data sets,” Caldecott told RI. “It needs to be brought together, cleaned up and augmented with other data to help investors perform relevant analysis.”
“There should be coordination and collaboration to make that information available”
Companies would be able to endorse the findings or, if they disagreed with them, would be offered the chance to provide their own evidence.
“Lots of organisations are starting to look at how to get asset-level information. We think there should be coordination and collaboration to make that information publicly available, rather than different bodies trying to provide it in different sectors using different formats. That would slow the uptake of asset-level data analysis.”
The venture was initially proposed earlier this year by Caldecott in an Oxford Smith School report prepared for the Norwegian Global Pension Fund. He said those involved were now working out how the coalition would function in practice, and securing funding. He added he was “confident both those things will be in place soon”, but that the initiative wasn’t expected to launch before the autumn.