This op-ed originally appeared in French in Le Monde.
One of the biggest challenges to fighting climate change gets little attention: lack of essential data.
We have an enormous amount of data showing that climate change is real and that dramatic steps must be taken to reduce emissions now.
We have an enormous amount of data showing what is causing climate change: the burning of coal and other fossil fuels.
But we have hardly any data showing exactly how much emissions individual companies are responsible for, or which are shifting to cleaner energy and manufacturing, or which are taking climate risks into account.
Without that data, there is no way for the public to hold companies accountable, and no way for investors to gauge their true value. It also impacts policymakers’ ability to design well-informed and efficient environmental public policies.
In addition, when companies make bold promises without being transparent about how they are reaching them, it understandably breeds public cynicism – and opens the door to “greenwashing,” where companies overpromise and under deliver.
Environmental leaders are absolutely correct to criticize hollow commitments. But we must do more: We must make it possible for companies to report data that the public can use to hold them accountable. And that is easier said than done.
For instance: More than 500 financial firms representing 40 percent of global assets under management have signed on to achieve net-zero emissions across their investment portfolios, through the Glasgow Financial Alliance for Net-Zero. But privately, many of those leaders say: We don’t have the data we need to do it.
Here’s the challenge: If a bank finances a power plant, an auto factory, and a grocery chain, it is helping to finance emissions generated by each company and their supply chains. But right now, the bank doesn’t know how much emissions each is generating, and thus has little leverage to push the companies to reduce them. Nor does it know whether those companies have plans to reduce reliance on fossil fuels or address risks flowing from climate change.
To begin changing that France, the United Nations, Bloomberg Philanthropies and the Glasgow Financial Alliance for Net Zero are joining forces with a group of public and private partners to create an open-data public platform to aggregate and standardize corporate climate data. The goal is a one-stop shop where investors and insurers – or anyone else – can find reliable data about a company’s emissions and how well they are addressing them. This transparent data portal will allow for company-by-company comparisons that are now very difficult and help assess climate risks those companies face.
Increasing the availability of standardized data will be of great use to investors, while also encouraging more companies to disclose their emissions, since failing to do so would put them at a competitive disadvantage. It will also allow the public to see which companies are leading the way, further incentivizing companies to act. Importantly, transparency and standardization will also make it much harder for companies to ‘greenwash’ by forcing them to back up words with action, and help eliminate excuses for inaction.
Providing this data requires collaboration across the public and private sectors and across borders, too. Today, we are taking an important step forward, by announcing a group of leaders who will work together to identify the data that will be most useful to investors and the public.
Following COP21 in 2015, France has been a pioneer in data transparency, becoming the first country to require companies to disclose climate risks along guidelines created by the Task Force on Climate-related Financial Disclosures. Other countries, including the US and UK, have since followed its lead.
Now, we are ready to take the next big step, by collecting the data necessary to track and target company emissions up and down the supply chain. If we succeed, it will be a breakthrough for global progress in the fight against climate change.