G20 TechSprint 2021

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The second edition of the G20 TechSprint, organised by the BIS Innovation Hub and the Bank of Italy, within the G20 Italian Presidency, searched for innovative solutions to resolve operational problems in green and sustainable finance.

For the G20 TechSprint 2021, the Bank of Italy polled the Ministries of Finance and Central Banks of the G20 countries (comprising permanent guest countries and international organizations) to identify high-priority areas in the fields of green and sustainable finance. They identified three problem challenges for which participants should develop innovative solutions.

Problem statements

Data Collection, Verification and Sharing

Presently, there is a perception of information asymmetry in the collection and sharing of environmental data to support environmental risk analysis (ERA). This stems from both a lack of consistent data methods and disclosure regimes, and a limited verification of self-reported returns which negatively affect confidence in the reliability of aggregated data sets. Can technological solutions, such as public web-scraping tools, blockchain, IoT, smart sensors and GPS and other kinds of non-traditional reporting data, contribute to a disclosure ecosystem that supports all stakeholders i.e. achieving timely, transparent and verifiable disclosure (including impact measurement and reporting), while reducing the disclosure workload and costs for corporates and other reporting entities and respecting data privacy policies in individual countries? Can technological solutions also be deployed to aid in better capturing and structuring relevant climate-related (meta)data digitally including through a 'rulebook' that showcases how rules and data requirements can be delivered as code in a consistent, high quality, transparent, comparable and standardised way, so as to enhance ERA?

Analysis and Assessment of Transition and Physical Climate-related Risks

One of the main difficulties facing non-financial corporations and financial corporations alike is the ability to accurately predict the vulnerabilities associated with transition and physical risks posed by climate change. As the world transitions towards climate-neutrality, there is the need to support institutions and relevant stakeholders with tools enabling them to visualize, predict, assess and monitor transition and physical risks. Can big data ingestion, predictive analytics and visualisation tools be developed to aid both regulators and institutions/corporates better assess and analyse these risks across different regions, sectors and asset classes?

Better connecting projects and investors

New technologies can support project promoters such as small and medium size businesses, start-ups or even local authorities to raise funds for sustainable projects, while at the same time enhancing transparency and opportunities for investors to finance a bigger pool of sustainable projects. Additionally, smallholders (e.g. individual farmers) and small commercial businesses and households may be marginalized financially and fail to benefit from green financing opportunities. Can technological solutions (e.g., digital identity verification, demand aggregation platforms, large scale, and easily accessible trading platforms) help connect projects and investors to scale up their impact in a secure way while respecting data privacy policies in individual countries? Can technological solutions also be used to effectively track platform performance and outcomes in terms of volume and quality of credit allocation and environmental impact and be deployable across geographies and different states of development?