Take urgent action to combat climate change and its impacts. This is an extract
from Finextra's The Future of ESGTech 2022 report.
Focus target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
According to the
Norwegian Refugee Council’s Internal Displacement Monitoring Centre (IDMC), climate disasters displaced 7 million people by the end of 2020. The global cost of one year of displacement was $20.5 billion in 2020, which came from re-housing, education, health
and security, and so on.
Fortunately, ESG data is on hand to help financial services players and fintech firms strengthen our resilience and adaptive capacity to climate change. In June 2021, a collaboration between Copernic Space, Exodus Orbitals and the Lady Rocket Foundation
made headlines for using satellite data to
map rhino habitats and battle poaching activities across Africa. Crucially, their ‘satellite-as-a-service’ and ‘mission-as-a-service’ platform has huge potential for monitoring climate-related hazards.
With a ‘satellite ride-sharing license’, buyers of Copernic Space’s product can gain access to specific satellite images, at the preferred times, to, for instance, monitor land via change detection capabilities.
According to the
2021 World Development Report, when a sudden and unexpected climate shock hits – such as a natural disaster – data is key to providing precious, real-time information on human mobility and call density. “The timeliness of private intent data contrasts with
public intent data, which is generally collected at intervals of 1, 5, or 10 years and thus is not always very timely.” The collaboration between Copernic Space and Exodus Orbitals can provide faster access to data by democratising space.
There are other projects serving to plug the climate data gap. On the meteorological side, information is now being shared in real time between the European Centre for Medium-Range Weather Forecasts (ECMWF) and all 37 countries participating in the Regional
Integrated Multi-Hazard Early Warning System for Africa and Asia (RIMES), says the
World Development Report. “The Bangladesh Meteorological Department, for example, increased from 10 to 32 the number of stations sharing observational data taken every three hours, and provides nearly 40 years’ of historical data. The total number of stations
added by all RIMES members is now 500 and is expected to increase to 1,500 soon.” This sharing of ESG data should result in a significant improvement in the accuracy of weather forecasts, and boost our ability to respond to environmental hazards.
Crucially, financial institutions can use this ESG data – along with artificial intelligence (AI) and machine learning (ML) tools, such as those provided by climate intelligence platform,
EarthScan – to model how climate change is impacting the assets they rely on. This is key to de-risking business decisions and powering adaptation strategies.
In 2019, the European Bank for Reconstruction and Development (EBRD) introduced two new bonds: the Climate Resilience Bonds and Green Transition Bonds. Climate Resilience Bonds are focused on climate change adaptation, whereas Green Transition Bonds are
focused on economic sectors that are dependent on the use of fossil fuels to enable their decarbonisation pathways. At COP26, the bank announced its intention to
double the mobilisation of private sector climate financing by 2025.
Once again, ESG data will play a leading role in ensuring this kind of capital is well-placed – and take us ever closer to achieving the UN’s 13th SDG around climate action.
ACTION FOR 2022: Utilise data to strengthen our resilience and adaptive capacity to climate change.