New regulatory obligations that come from the EU Sustainable Finance agenda require financial market participants to have access to comparable and reliable ESG data. Financial institutions and investors also need more ESG data to be able to steer their portfolios towards the objectives of the Paris Agreement and of the European Green Deal. This has created an urgent need for such data to become publicly available.
Unfortunately, the availability of high quality and comparable public ESG data is currently rather limited and is insufficient to comply with new regulatory requirements, including sustainability disclosures and taxonomy regulations. While the changes planned for the Non-Financial Reporting Directive (NFRD) should ensure that companies under its scope will disclose the ESG data needed by financial market participants, this will not address the need for efficient access to the data.
Therefore, ensuring the availability of high quality and comparable ESG data should be regarded as a strategic infrastructure project to meet the EU's sustainability objectives under both the Action Plan on Sustainable Finance and the EU Green Deal. The European data register should focus on the ESG data that is necessary for financial market participants to comply with the sustainability disclosures regulation and taxonomy.