Over 72% Financial Institutions to invest heavily in ESG Technology

By Gloria Methri

Amid growing climate risks, financial institutions are keen on investing in ESG (environmental, social, and governance) technology, with over 72% planning to spend up to $500,000 a research from BCT Digital claims.

BCT Digital, a global digital transformation company that delivers FinTech, RegTech and SustainTech solutions, has published the findings of its extensive survey, which it conducted in collaboration with Chartis Research.

Titled ‘Chartis Market View: ESG and Climate Risk Survey‘, it analyzes how global financial institutions are integrating ESG and climate risk factors into their risk management and investment decision-making processes.

The survey captured insights from 77 ESG and climate risk practitioners representing financial institutions with AUM ranging from $1 billion to $500 billion based in the APAC, North America, Europe and the MENA region. It is found that over 72% of financial institutions plan to spend upto $500,000 or more on ESG technology.

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.

When it comes to ESG, 52% of the respondents indicated regulatory compliance as the primary challenge, followed by risk assessment (48%). For climate risk, the challenges are meeting regulatory stress testing expectations (67%), accurate Greenhouse Gas Accounting (56%) and integrating climate risk operationally into product lines (50%).

Jaya Vaidhyanathan, CEO of BCT Digital, said, “We are happy to present this survey that uncovers trends, challenges, and priorities within the ESG and climate risk space, addressing questions such as the evolution of technology markets, demographic impacts on risk planning, and the primary drivers of firms’ strategic agendas. There is a lack of uniformity in sustainability and climate risk reporting standards; different countries may have their own frameworks. This disparity makes it challenging for multinational corporations to maintain consistent reporting. We are ready to tackle the growing needs of the ESG and climate risk markets, and based on this survey, confident about addressing the intersection of these two fields.”