Survey by BCT Digital and Chartis Research: Over 72% of Financial Institutions plan to invest heavily in ESG Technology

• Global ESG and Climate Risk Spending Trends Unveiled in New BCT Digital and Chartis Research Report
• Survey Highlights Regulatory Compliance as Top Challenge for ESG and Climate Risk

Chennai, July 11, 2024: BCT Digital, a global digital transformation company delivering FinTech, RegTech, and SustainTech solutions, in collaboration with Chartis Research, has published the findings of their extensive ESG and Climate Risk Survey. 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.

Jaya Vaidhyanathan, CEO, BCT Digital

The survey captured insights from 77 ESG and climate risk practitioners representing financial institutions with assets under management ranging from $1 bn to $500 bn based in the APAC, North America, Europe and the MENA region. It is found that over 72% of global financial institutions plan to spend upto $500,000 or more on ESG technology. In this bid, over half of global financial institutions feel keeping up with changing regulations as the biggest ESG-related challenge.

Key findings:

Most firms review their ESG strategies quarterly, spending an average of $250,000 to $500,000 annually, with North American and European institutions more likely to exceed $500,000. The next year’s investments are expected to focus on ESG data and scoring products, governance, risk management and compliance (GRC) solutions, and regulatory compliance and reporting tools.

As per the findings, when it comes to ESG, 52% of the respondents indicated regulatory compliance, being the most significant challenge. About 48% of the respondents identified risk assessment and mapping relevant ESG whereas another 48% viewed integrating ESG into operational and financial workflows as significant challenges.

With respect to climate risk, the main challenges are meeting regulatory stress testing expectations (67%), accurate GHG (Greenhouse gas) accounting (56%) and integrating climate risk operationally into product lines (50%). Most firms spend between $250,000 and $500,000 on climate risk solutions, with future investments likely to be directed towards emissions data, transitional climate risk modeling, and regulatory reporting tools.

On the report launch, Jaya Vaidhyanathan, CEO, BCT Digital: “We are happy to present this crucial survey which aimed to uncover trends, challenges, and strategic priorities within the ESG and climate risk space, addressing key questions such as the evolution of technology markets, demographic impacts on risk planning, and the primary drivers of firms’ strategic agendas. As highlighted by the findings, there is a lack of uniformity in ESG and climate risk reporting standards; different countries and regions may have their own frameworks and definitions. This disparity makes it challenging for multinational corporations to maintain consistent reporting. The detailed findings of this survey provide valuable insights for financial institutions aiming to enhance their ESG and climate risk management frameworks.”

“BCT Digital is ready to tackle the growing needs of the ESG and climate risk markets, and based on this comprehensive survey, we are now even more confident about addressing the intersection of these two fields,” Jaya added.

Sid Dash, Chief Researcher, Chartis, expressed, “Compliance with ESG guidelines can be a challenge for many financial institutions, and data and data management are central to the compliance process. Having a fully integrated framework which enables data management across the entire value chain is crucial.”

The survey covered industry segments like retail, corporate and commercial banking, asset management, private wealth management, broker-dealers, cooperative banks, microfinance institutions, credit unions, and non-bank financial institutions. For more information, refer to the report.

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