On 24 June, attendees to our 'Financing net zero forum' tuned in to hear the expert panel discussions on the role of data in sustainable investment. Joining the meeting chairs, Cornwall Insight's Daniel Atzori and Emma Bill were our guest panellists from Mercatus and Victory Hill Capital Group LLP.
For investors to make sustainable investments, data is critical, according to the panel. However, as energy systems progress towards net zero, the data captured will be increasingly more complex due to the vast amount of data that energy markets will produce and upcoming climate disclosures.
As a result of this, the panel expressed the importance of conveying the right messages to investors to fully understand the impacts of the investments, helping them make the right decisions.
Still, investors face an added level of complexity with a combination of macroeconomic conditions with higher inflation due to the effects of the COVID-19 pandemic and some interesting drivers in the energy market.
The panel pointed out that all these things make it even more important for investors to understand the markets fully. This makes the data coming from these markets vital, so all participants understand how everything interplays with each other.
Data is essential for portfolio management when trying to manage and mitigate risks, and the panel made it clear how fundamental to the job keeping on top of the data is for their clients. However, there are currently barriers to accessing this data vital to making quick judgements in sustainable investments.
These barriers are more than just putting the right tools in place. According to the panel, while this may be important, conveying the messages from the data accurately to investors allows them to see the macro picture of their investments and help them understand the micro-level. On top of this, Tom Edwards, Senior Modeller at Cornwall Insight, stated that the everchanging nature of the market means that data collectors need to ensure that the data keeps pace with the change.
The fast nature of the market makes sustainable investments more complex. Any participant in the energy market will need to cope with vast swathes of data, all of which have an intrinsic value.
Being able to interpret the data correctly and quickly allows investors to position themselves ahead of their competitors. According to the speakers on the panel, it is this that makes data in the sector valuable but critical. Using the data in new smart, innovative ways should allow companies to be flexible and adapt as the market changes.