The way that digital sustainability data flows between systems and stakeholders today is not fit for purpose. This siloed, complex and inconsistent system for information data flows, is costing the global economy trillions of US dollars each year, and results in less informed decision-making. That, in turn, negatively impacts businesses, economies, communities, the climate and the natural world. This project brings together, for the first time, all of the major constituents in this space – from regulators, data specialists, standard setters, ratings agencies, technology companies, preparers and users – to design and develop an integrated and interoperable global digital sustainability data flow system.
Managing, analyzing and interpreting sustainability data adeptly is crucial to the success of resilient businesses and a sustainable planet.
Vast quantities of sustainability data are generated every day from a wide range of organizations around the world. Sustainability data flows between many players and across a global landscape from the point of creation through the point of consumption. But, as data moves through this information flow system, it runs up against numerous barriers.
In many cases this data is challenging to locate, fragmented, devoid of context, created using unaligned definitions and vocabularies and is presented in a vast array of different formats, many of which are largely incompatible. Large quantities of data are not digitalized at all, some systems are manual, and consequently lots of important decision-relevant information falls between the cracks. The result: trusted data is lacking.
Data auditability remains a significant challenge, and subsequently information is often not as useful as it needs to be for organizations to make integrated, data-driven decisions based on the value of their impacts and dependencies across the capitals.
This information system challenge places a significant financial burden directly on organizations and other stakeholders. The financial services industry alone spends almost 800 billion USD each year managing data for compliance purposes alone. Extrapolated globally across all industries, trillions of dollars are spent each year on compliance activities that offer limited value to organizations and stakeholders. With a more robust and effective system, data becomes trusted and decision useful and compliance can be met while freeing up the cost savings which can be reinvested in initiatives that deliver value across the capitals.
Solving the challenges around digitizing sustainability information flows is larger than the industry can solve on its own. What is needed is for key players across the global system to collaborate under a common objective: actively collaborate towards an agreed global digitized data management structure for sustainability, treating sustainability data with the same or better control, governance, transparency and assurances as that of financial statement data disclosures.
This project brings together, for the first time, all of the major constituents in this space – from regulators, data specialists, standard setters, ratings agencies, technology companies, preparers and users – to design and develop an integrated and interoperable global digital sustainability data flow system.
Together, this leadership group will assist the International Financial Reporting Standards (IFRS) Foundation’s IFRS Taxonomy Consultative Group (ITCG) working with the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) amongst others.
The group will also co-construct a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make informed decisions.
The project will support national and international ESG/climate mandates through the creation of an agreed upon standard compliance guidelines for global data comparison using freely available, open-sourced technologies for better decision making to expedite solutions climate change, nature-loss and inequality.
The aim of this project is not to reinvent the wheel, but to drive global collaboration between the key systems and organizations within the current landscape. Together we will ensure that data can flow effectively across the system and that it will supply the information that organizations and stakeholders need to make better informed decisions that deliver value for nature, for people and for their organizations.