Amid growing climate risks, financial institutions are increasingly investing in ESG (environmental, social, and governance) technology, with over 72% planning to spend up to $500,000, according to research from BCT Digital. BCT Digital, a global digital transformation company specializing in FinTech, RegTech, and SustainTech solutions, conducted an extensive survey in collaboration with Chartis Research. 

The survey, titled “Chartis Market View: ESG and Climate Risk Survey,” examines how financial institutions worldwide are incorporating ESG and climate risk factors into their risk management and investment decision-making processes. Insights were gathered from 77 ESG and climate risk practitioners representing financial institutions with assets under management (AUM) ranging from $1 billion to $500 billion across APAC, North America, Europe, and the MENA region. It was found that most firms review their ESG strategies quarterly, spending an average of $250,000 to $500,000 annually, with North American and European institutions likely to exceed $500,000. 

Regulatory compliance is the primary challenge for ESG, cited by 52% of respondents, followed by risk assessment at 48%. For climate risk, the main challenges include meeting regulatory stress testing expectations (67%), accurate Greenhouse Gas Accounting (56%), and integrating climate risk into product lines (50%). 

Jaya Vaidhyanathan, CEO of BCT Digital, highlighted the survey’s revelations about trends, challenges, and priorities within the ESG and climate risk space. She noted the lack of uniformity in sustainability and climate risk reporting standards across different countries, which complicates consistent reporting for multinational corporations. Vaidhyanathan emphasized BCT Digital’s readiness to address the growing needs of the ESG and climate risk markets, expressing confidence in tackling the intersection of these fields based on the survey findings. 

Sources: 

https://ibsintelligence.com/ibsi-news/over-72-financial-institutions-to-invest-heavily-in-esg-technology/ 

https://www.prnewswire.com/ae/news-releases/survey-by-bct-digital-and-chartis-research-over-72-of-financial-institutions-plan-to-invest-heavily-in-esg-technology-302196963.html#:~:text=It%20is%20found%20that%20over,institutions%20likely%20to%20exceed%20%24500%2C000.