Recently published research conducted by Funds Europe has revealed that data management is the biggest challenge facing asset managers in their efforts to develop a framework for tracking climate-related risk.

The survey of close to 250 fund management professionals, conducted in partnership with Caceis, asked if firms have sufficient data to examine climate risk exposures across their funds.

Only a third (31%) have relevant data at a granular level across all of their funds. A similar number (32%), have sufficient information flow but only for climate-specific funds. The largest number though (37%) simply do not have sufficient information for all their funds.

The survey also found that 79% of respondents cited lack of consistent methodology among data providers  as their biggest challenge in building a climate risk reporting framework. A lack of data (35%) and data inconsistency (33%) were also cited.

The publication of the research report coincides with the news that the Basel Committee on Banking Supervision has issued a set of climate risk guidelines to help central banks and financial regulators across the globe to co-ordinate their respective approaches.

The paper sets out 18 principles covering corporate governance, internal controls, risk assessment, management and reporting.

In a statement accompanying the guidelines, the committee said that it “expects implementation of the principles as soon as possible and will monitor progress across member jurisdictions to promote a common understanding of supervisory expectations and support the development and harmonisation of strong practices across jurisdictions”.

The Funds Europe/Caceis research report can be accessed here

©2022 fundsTech