Climate Data in the Investment Process

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THEME: SUSTAINABILITY </span> </div>  <span class="spotlight-hero__meta spotlight-max-width-item items--piped"> <span class="items__item">16 April 2024</span> <span class="items__item">Article</span> </span> <h1 class="spotlight-hero__title spotlight-max-width-item"> Climate Data in the Investment Process: Challenges, Resources, and Considerations </h1> </div> </div> </div> </section> <section class="article-grid">  <section class="grid__item--full-width grid__item--inset grid__item--initial">  <div class="grid__container grid__container--normal-column-gap">  <article class="grid__item--article-body"> <section class="authors__container grid__item--article-element theme--insights"> <ol class="authors__list"> <li class="authors__item"><a href="https://www.linkedin.com/in/vinelli/" target="_blank">Andres Vinelli</a></li> <li class="authors__item"><a href="https://www.linkedin.com/in/deborah-kidd-cfa-4337088/" target="_blank">Deborah Kidd, CFA</a></li> <li class="authors__item">Tyler Gellasch</li> </ol> </section>  <section class="share"> Share this: <ol class="inline-list"> <li class="share__item" title="Share on Facebook"> <a href="https://www.facebook.com/sharer/sharer.php?u=https://rpc.cfainstitute.org/en/research/reports/2024/climate-related-data-in-the-investment-process&t=Climate Data in the Investment Process: Challenges, Resources, and Considerations" target="_blank"> <i class="icon icon--social-fb-alt"></i> <span class="sr-only">Share on Facebook</span> </a> </li> <li class="share__item" title="Share on Weibo"> <a href="https://service.weibo.com/share/share.php?url=https://rpc.cfainstitute.org/en/research/reports/2024/climate-related-data-in-the-investment-process&appkey=PUTAPPKEYHERE&title=Climate Data in the Investment Process: Challenges, Resources, and Considerations&language=zh_cn" target="_blank"> <i class="icon icon--social-weibo-alt"></i> <span class="sr-only">Share on Weibo</span> </a> </li> <li class="share__item" title="Share on Twitter"> <a 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href="/cdn-cgi/l/email-protection#8ab5f9ffe8e0efe9feb7c9e6e3e7ebfeefaaceebfeebaae3e4aafee2efaac3e4fceff9fee7efe4feaadaf8e5e9eff9f9b0aac9e2ebe6e6efe4edeff9a6aad8eff9e5fff8e9eff9a6aaebe4eeaac9e5e4f9e3eeeff8ebfee3e5e4f9acebe7fab1e8e5eef3b7e2fefefaf9b0a5a5f8fae9a4e9ecebe3e4f9fee3fefffeefa4e5f8eda5efe4a5f8eff9efebf8e9e2a5f8effae5f8fef9a5b8bab8bea5e9e6e3e7ebfeefa7f8efe6ebfeefeea7eeebfeeba7e3e4a7fee2efa7e3e4fceff9fee7efe4fea7faf8e5e9eff9f9" target="_blank"> <i class="icon icon--email"></i> <span class="sr-only">Share by Email</span> </a> </li> </ol> </section>   <section class="overview grid__item--article-element"> <span class="overview__content"> Climate-related data are critical to assessing and managing the financial risks and opportunities posed by climate change, yet the data are often inconsistent and unreliable. We discuss how regulations to enhance transparency are evolving and suggest how investors can make effective use of the data available to them. </span> </section>    <section class="grid__item--article-element"> <a class="content-asset content-asset--primary" href="/-/media/documents/article/industry-research/climate-data-in-investment-process.pdf" > <span class="content-asset__type icon icon--asset-pdf "></span> <span class="content-asset__title"> <span class="content-asset__emphasis">Climate Data in the Investment Process: Challenges, Resources, and Considerations</span> View PDF </span> </a> </section>      <section class="grid__item--article-body-float-right call-out theme--insights"> <a class="call-out__link" href="https://www.cfainstitute.org/en/programs/climate-risk-valuation-investing" target="_blank"> <div class="call-out__title"> </div> <div class="call-out__media"> <img class="media__ratio--wide media__fit--cover" src="/-/media/images/cards/new-brand-industry/windmills-along-water.jpg?w=636&hash=3AE99ADE4C83C24BF473E2338BC2C4B4" alt="windmills-along-water"> </div> <div class="call-out__content"> <span class="call-out__cta"> Climate Risk, Valuation, and Investing Certificate </span> <p class="call-out__description"> Advance your career with a certificate that builds skills and expertise to integrate climate-related considerations into portfolio management, including transition finance, and to communicate complex concepts effectively to clients. </p> </div> </a> </section>   <section class="grid__item--article-element"> <h2 class="article__title">Report Overview</h2>  <div class="article__paragraph"> <p> Climate change is impacting the world in profound ways, driving extreme weather events and posing increasing risks to human life, infrastructure, and ecosystems, with the direct impacts falling inequitably among different geographies and demographics.</p> <p>To mitigate the most severe impacts, experts argue that global warming must be limited to less than 1.5 degrees Celsius (above pre-industrial global temperature levels), and the world must transition to net-zero greenhouse gas (GHG) emissions by 2050. Achieving this transition will require significant capital investment. </p> </div>  </section> <section class="grid__item--article-element">  <div class="article__paragraph"> <p>“Climate-Related Data in the Investment Process: Challenges, Resources, and Considerations” aims to answer three increasingly imperative questions regarding climate-related data and investing:</p> <ol> <li>What type of climate-related information is used in the investment process, and where can an investor get the data? </li> <li> What are the risks and limitations of using climate-related data, and how can an investor navigate these? </li> <li>How will current and forthcoming disclosure regulations and standards help with data transparency, reliability, and comparability?</li> </ol> <p>Governments, companies, banks, insurers, asset owners, and asset managers are all taking steps to address climate-related risks and opportunities. Central to the efficacy of their efforts is the availability of reliable climate-related data to measure and analyze these risks and opportunities. But there are challenges associated with obtaining high-quality data, including inconsistencies, lack of transparency, and varying methodologies. 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Climate Data in the Investment Process