April 28, 2023

Your weekly Invert Insights are here:

• The value of digital technologies in decarbonization and climate action
• Bridging the gap between investors and sustainable finance
• Building trust in ESG reporting
• Trending: Oversupply of Renewable Energy 

The Value that Digital Technologies Bring to Decarbonization and Climate Action

A new paper from the World Economic Forum, Blockchain for Scaling Climate Action, has been released, highlighting the role digital technologies, including blockchain, can have to support current and emerging climate solutions. Blockchain’s value propositions can be broadly categorized into four categories: strengthening trust and ambition in climate negotiations, improving market transparency and credibility, funneling more money to project developers, and democratizing access to climate action. 

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Invert Insights:

Connecting global carbon registries using blockchain technologies to create a single, standardized system for tracking carbon credits has the potential to significantly improve the trust and transparency of the market as a whole. As a result, this would promote the growth and liquidity of voluntary carbon markets, attracting more participants and contributing to global efforts to combat climate change.
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Bridging the Gap Between Investors and Sustainable Finance

The Central Banks of Singapore and China, announced the launch of the China-Singapore Green Finance Taskforce (GFTF), with the aim to facilitate financing for Asia’s low carbon transition. The priority areas for cooperation include taxonomies and definitions, products and instruments, and technology. It aims to achieve interoperability between Singapore and China taxonomies and strengthen sustainability bond market connectivity. The taskforce will aso pilot digital green bonds with carbon credits to facilitate sustainable finance adoption.

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Invert Insights:

The GFTF will make it easier for investors to identify and evaluate sustainable investment opportunities and also provide more options to participate in sustainable finance through bonds and carbon credits. The GFTF will help to catalyze capital flows to support the transition to a carbon future not only for China and Singapore but for the region, which in turn will help investors to achieve their sustainability goals.  
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Building Trust in ESG Reporting

A survey made of over 3,000 professionals attending an event on ESG reporting readiness, reported that less than half of participants expressed confidence in their finance teams’ abilities to gather and report on ESG financial metrics. The survey also revealed that confidence in ESG reporting capabilities increased significantly if organizations had a dedicated ESG reporting team in place; however, less than 20% of respondents claimed that their organization had one. Data collection was cited as the greatest challenge that controllership teams face on their ESG efforts. 

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Invert Insights: 

Employee confidence in an employer’s ability to report on ESG metrics is important because it directly impacts the credibility and trustworthiness of the organization. As new ESG disclosure requirements are introduced across jurisdictions, organizations without a dedicated ESG reporting professional or a finance team involved in ESG matters are at risk of falling behind. By investing in ESG reporting capabilities and protocols, organizations can build trust in their reporting, which is shown to be increasingly important to stakeholders such as employees, customers, and investors.

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Trending: Oversupply of Renewable Energy 

Due to particularly sunny weather in Poland, the country’s grid operator, PSE, issued a rare declaration of an official threat to the security of electricity supplies. The cause was an excess of renewable energy in the system, which led PSE to order the temporary disconnection of solar and wind facilities. This incident has raised concern among experts, who are warning that the electricity grid must be upgraded to accommodate the increasing reliance on renewable energy sources.