Supporting the transition: Green Assets Wallet covers 72% of green bondsJuly 12, 2022
Current impact reporting practices lack consistency, are based on different methodologies and unverified data. Without comparable data sets and no uniform methodology to measure impact, investors and issuers of labelled debt instruments spend a disproportionate amount of resources and time on producing impact reports.
Green Assets Wallet now covers 72% of green bonds in the global market and all regions across the globe.
Even when a report follows the necessary recommendations and impact is categorized according to ICMA guidelines, using the recommended indicators and units, it is still far from being harmonized.
Investors need harmonized data to reach their impact goals and hence support the transition. Data however are far and few between from being accessible or available in the necessary format. Green Assets Wallet, together with some of the biggest stakeholders in debt capital markets, have made great progress towards a common vision of harmonized data collection and analytics.
Data harmonization: The key for quality, reproducibility, and market confidence
Data harmonization has a direct impact on quality, reproducibility, and confidence in how to define impact and avoid greenwashing in capital markets. By embracing existing frameworks that have gained recent traction and focusing on quantifiable and comparable data sets, impact reporting is reaching new levels of quality.
And yet it remains burdensome to collect the necessary ESG-data. At the same time, investors are still unable to make useful analyses, comparisons, and aggregations. “To mobilize transition finance, we need impact reporting solutions that offer debt capital markets an assurance that their impact is aligned with different frameworks and is calculated based on the best-quality data,” explains Cecilia Repinski, CEO & Founder of Green Assets Wallet.
We aim towards visualizing impact-at-a-glance.
At Green Assets Wallet, over 500 issuer impact reports from different regions and industries have been analyzed. “We understand firsthand the complexity of impact reporting. Even when a report follows the necessary recommendations and impact is categorized according to ICMA guidelines, using the recommended indicators and units, it is still far from being harmonized.”
The main goal for Green Assets Wallet is to make impact reporting as uniform as financial reporting, while being trusted by third parties and verified for impact claims. For investors to make the best possible allocation choices, they should be able to see impact at the portfolio-level as well as the project-level, preferably next to their financial results. “We aim towards visualizing impact-at-a-glance. This can then be levelled down into deeper more detailed data sets, to give the most accurate level of reporting and to avoid ambiguity and greenwashing.”
The next generation of impact reporting: Impact at a glance
The next generation of the Green Assets Wallet’s impact intelligence platform allows issuers to harmonize data at these different levels, offering leading impact reporting in a new dimension. “Essentially, we are moving towards a shared terminology and metrics that can be used to aggregate and evaluate investments comparatively and over time.” Leveraging existing frameworks and standards, while harmonizing data models that allow data to be exchanged, aggregated and communicated is what the impact intelligence platform offers. One example is how different metrics are translated, for example Green House Gas Emissions (GHGs) towards impact.
“Just as the market scrutinizes and evaluates financial performance, we will be able to see this for impact performance. This will be available for all industries, ranging from financials to corporates. The market is ready for this and so are we,” emphasizes Cecilia Repinski.