Navigating Climate Data Disclosure

As markets and society reckon with the systemic risks posed by climate change, high-quality climate data can play a critical role in determining the right actions to take. Indeed, if economic actors are to make socially-optimal decisions to tackle climate change, not only will their incentives need to be aligned, but they will also need to rely on a common set of data to inform and motivate actions to mitigate and manage climate risk.

Climate scientists need high-quality data to drive their models and projections for the Earth’s future climate. Policymakers require climate data to measure the impact of climate change on the economy and their policies to address it. Supervisors depend on it to quantify risks and assess transmission channels. Financial institutions should use it to inform investment and lending decisions and to monitor performance. Corporations need it to manage their value chain impacts and climate risks and opportunities. Finally, customers depend on it to inform their purchasing decisions.

In short, climate data is crucial for both informing decision-making and holding other economic agents to account. At the same time, data is not created in isolation but rather depends on each actor’s interpretation of how the external environment impinges on their business and the transmission and aggregation of that information from downstream to upstream stakeholders along a value chain.