Global ESG and Climate Risk Spending Trends Unveiled in New BCT Digital and Chartis Research Report
BCT Digital and Chartis Research have recently released a comprehensive survey on global ESG and climate risk spending trends, shedding light on how financial institutions are incorporating these factors into their decision-making processes. The survey, titled ‘Chartis Market View: ESG and Climate Risk Survey’, gathered insights from 77 practitioners representing institutions with assets under management ranging from $1 billion to $500 billion.
One of the key findings of the survey is that over 72% of global financial institutions are planning to invest up to $500,000 or more in ESG technology. However, the biggest challenge identified by over half of the respondents is keeping up with changing regulations in the ESG space.
The survey also revealed that most firms review their ESG strategies quarterly, with an average annual spending of $250,000 to $500,000. North American and European institutions are more likely to exceed the $500,000 mark in their ESG investments. The upcoming year’s investments are expected to focus on ESG data and scoring products, governance, risk management and compliance solutions, as well as regulatory compliance and reporting tools.
In terms of challenges, regulatory compliance was highlighted as the most significant obstacle in the ESG space, with 52% of respondents pointing it out. Risk assessment and mapping relevant ESG factors, as well as integrating ESG into operational and financial workflows, were also identified as significant challenges by nearly half of the respondents.
When it comes to climate risk, meeting regulatory stress testing expectations, accurate GHG accounting, and integrating climate risk operationally into product lines were identified as the main challenges. Most firms are currently spending between $250,000 and $500,000 on climate risk solutions, with future investments likely to be directed towards emissions data, transitional climate risk modeling, and regulatory reporting tools.
Jaya Vaidhyanathan, CEO of BCT Digital, emphasized the importance of the survey in uncovering trends and strategic priorities in the ESG and climate risk space. She highlighted the lack of uniformity in ESG and climate risk reporting standards across different countries and regions, making it challenging for multinational corporations to maintain consistent reporting.
Sid Dash, Chief Researcher at Chartis, stressed the importance of data and data management in compliance with ESG guidelines, emphasizing the need for a fully integrated framework to enable data management across the entire value chain.
The survey covered various industry segments, including retail, corporate and commercial banking, asset management, private wealth management, and non-bank financial institutions. For more information on the survey findings, refer to the report released by BCT Digital and Chartis Research.