Ref: https://drcf.org.uk/publications/papers/insightssmartdataframeworks 

Published on 26 March 2026, this report from the Digital Regulation Cooperation Forum (DRCF) provides an international comparative analysis of Smart Data implementation models to inform the UK’s strategic approach under the Data (Use and Access) Act (DUAA) 2025.

Core focus

The report reviews how jurisdictions worldwide have approached consumer data portability and Smart Data ecosystems, drawing lessons to help the UK implement its cross-sectoral Smart Data ambitions. The DUAA 2025 empowers the Secretary of State to create sector-specific Smart Data schemes via secondary legislation, building on the Open Banking precedent. As of May 2025, one in five UK consumers and small businesses were actively using Open Banking services, up from one in seventeen in March 2021.

Three implementation models

The report categorises global Smart Data approaches into three main models:

1. Regulator-mandated 

Government-led, prescriptive legislation (e.g. Australia’s Consumer Data Right, Brazil’s Open Finance). Provides legal certainty and mandated participation, but risks high compliance costs, regulatory rigidity, and potential for stifling innovation. Australia’s experience is cited as a cautionary tale of disproportionate costs relative to uptake.

2. Market-facilitated  

Industry-driven, with regulators in a facilitative role (e.g. US, Japan, Hong Kong). Fosters innovation and commercial flexibility but suffers from inconsistent standards, fragmentation, slower incumbent adoption, and uncertain liability frameworks. The US is experiencing particular instability following legal challenges to its framework, which has been seen as lacking unambiguous positioning.

3. Public infrastructure-led 

Built on foundational national Digital Public Infrastructure such as digital identity and data exchange layers (e.g. Estonia’s X-Road, Singapore’s SGFinDex via Singpass). These solve interoperability and trust-by-design but require major upfront investment and sustained political commitment. Estonia saves an estimated 820+ years of working time annually through X-Road.

A fourth category, Hybrid and Transitioning, covers jurisdictions like India (Account Aggregator / DEPA framework, with over 100 million consents by 2024) and the UAE (transitioning from market-led to a centrally mandated Open Finance framework).

Key themes from the analysis

Governance

A central coordinating body is consistently identified as critical. Without it, sector-by-sector schemes under the DUAA risk creating new data silos rather than eliminating them.

Standards and interoperability

Cross-sector fragmentation is a recurring failure mode. The risk that different UK government departments managing different Smart Data schemes could produce divergent technical standards is highlighted as a significant concern.

Consumer consent journey

Legal compliance alone is insufficient. The quality of the consent user experience is as important as the legal principle. Brazil’s experience shows how broadly drafted consent forms led to data misuse and loss of public trust. India’s AA framework shows high consent numbers but low conversion due to friction. Singapore’s integration with Singpass is held up as a model of frictionless, trustworthy consent.

International alignment

The report recommends aligning with Gaia-X (the EU’s federated data infrastructure framework) to protect the UK’s data adequacy status (renewed until 2031), maintain access to EU digital markets, and reduce compliance burdens for internationally active businesses.

Anti-competitive risks

The report flags the possibility that Smart Data schemes could inadvertently facilitate tacit collusion if they enable easy monitoring of competitor pricing — a novel risk that warrants safeguards by design.

Considerations for the UK

The report proposes five strategic pillars:

1. A central Smart Data governance body to coordinate all schemes, set baseline standards, and prevent fragmentation.
2. Phased, use-case-driven rollout prioritising energy (for Net Zero), finance, and telecoms, learning iteratively before expanding.
3. Sector-tailored implementation models — acknowledging that some sectors suit market-led approaches while others need regulatory mandates, within a unified strategic framework.
4. Interoperability by design, integrating with the UK’s Digital Verification Services (DVS) trust framework (as envisioned in the DUAA) to create a trusted, unified consent architecture.
5. Clear secondary legislation covering liability frameworks, security standards, transparent cost-benefit processes, and safeguards against anti-competitive conduct.

Relevance to IB1

The DRCF report findings and recommendations are closely aligned with IB1’s existing work and strategic positioning.  

Central governance and Trust Frameworks

The report’s core recommendation, a ‘central’ body setting common baseline standards and ensuring cross-sectoral interoperability, closely mirrors the architecture IB1 has developed through its Trust Framework and Scheme architecture. The DRCF’s concern about fragmented sectoral schemes producing new data silos is precisely the problem IB1’s governance approach is designed to solve, specifically the interoperability between them.

Energy Smart Data and Perseus 

The report explicitly names energy as a priority sector for Smart Data designation, citing its alignment with Net Zero policy objectives. IB1’s Perseus programme, enabling permissioned energy data access for SME carbon reporting and green finance, is an existing example of the kind of sector-specific, use-case-driven scheme the report advocates.

Consent and liability frameworks

IB1 has developed detailed consent and liability standards across energy, water, finance, supply chains, and other sectors. The DRCF’s finding that the quality of the consent journey is as critical as the legal principle, and that clear liability apportionment is essential for industry confidence, directly reinforces the value of this work.

Interoperability across sectors

The report warns that without strong central coordination, different government departments could develop incompatible standards across schemes. IB1’s cross-sector interoperability work, including its engagement between Open Energy, Perseus and Open Banking, addresses this risk directly.

International standards alignment

The report recommends aligning with international frameworks such as Gaia-X. IB1’s engagement with cross-border data governance and its work across multiple jurisdictions is consistent with this direction.

The DRCF report diagnosis and recommendations map closely with the approach IB1 has built, and provides independent external validation of the strategic importance of IB1’s work.

At the Perseus 2025 AGM it was reported that Perseus is:

• evolving from ‘financing green’ to embedded sustainable finance creating a potential addressable market of £5-10 billion
• adding gas, extending energy coverage from Scope 2 (electricity) to Scope 1
• estimated, via its existing members, to have potential reach of over 1 million UK SMEs and cover over 70% of use cases
• continuing to advance ‘Perseus Ready’ implementations with commercial members
• running a live sandbox (equivalent to production) for use by Carbon Accounting Providers (CAPs) and Energy Data Providers (EDPs) to develop solutions
• working with Perseus members to develop go-to-market capabilities to support hundreds of thousands of SMEs
• exploring integration with Open Banking to enable cross-sector interoperability
• producing XBRL outputs to enable integration with financial reporting systems
• pioneering the development of a voluntary, cross-sector Smart Data scheme, aligned with the UK Data Act and supported by an openly-licensed digital public infrastructure (DPI) architecture for secure data sharing 

“Perseus makes it easier for everyone to do their carbon calculations properly, and comfortably moves us years ahead of the most stringent proposed updates to the GHG Protocol. This is exactly why Sage intends to roll out a Perseus enabled product to make reporting easier for hundreds of thousands of UK SMEs.”

George Sandilands, Vice President, Sage Earth

From financing green to embedded sustainable finance

For much of the last decade, ‘green finance’ has focused on funding individual projects: a retrofit here, a solar installation there. Important, but limited. 

Perseus marks a shift to something far more systemic: it moves beyond financing green to embedding sustainable finance by integrating trusted, verifiable emissions data directly into everyday accounting and financial decision-making.

This evolution means Perseus can be applied across the whole SME market, not just specialist green products. Rather than expecting SMEs to seek out solutions themselves – something most lack the time or expertise to do – Perseus brings trusted insights to where they are (e.g. inside their existing accounting, banking and carbon applications). 

Perseus can support lending, credit and debit products, and even savings accounts, allowing sustainability performance to be reflected wherever financial decisions are made. The impact on SMEs is significant: personalised insights, lower reporting costs, easier access to capital for energy-efficiency upgrades, and new space for financial innovation. By making sustainability data usable at scale, Perseus aims to help turn ‘net zero’ from a niche ambition into a normal feature of how the economy works.

“As a leading smart data initiative, Perseus is developing guardrails for assurable data to support finance and supply chain decisions towards a sustainable economy.”

Hannah Gilbert, Director of Sustainability, British Business Bank

Access TNFD’s full report here

What does good nature data look like?

Working across multidisciplinary stakeholder teams, we identified seven key principles for high-quality nature datasets, acknowledging that nature data should be:

• Transparent and reproducible
• Credible
• Accurate and complete
• Relevant and decision-useful
• Accessible and usable
• Legal, ethical, privacy protecting
• Networked and compatible

Our Process

TNFD provided a roadmap of use cases, which we used as a foundation to work from. From this, our user-needs led approach helped define who the data users were as we developed a set of recommendations and principles that could lay the groundwork for nature data that supports financial decision-making.

“The Taskforce is very clear that its focus and contribution is on addressing use cases specific to corporations and financial institutions”

TNFD: A roadmap for upgrading market access to decision-useful nature-related data

Findings from the pilot testing of proposed nature data principles:

After evaluating 40 existing datasets against these principles, we confirmed that none fully met the standards required for global reporting or investment use. This exposed a critical gap for the financial sector: the absence of reliable, comparable, and standardised nature data needed to direct capital toward nature-positive outcomes.

“We tested 40 datasets against robust criteria for decision-useful nature data and found that none of them fully met the principles required for global reporting and investment needs.” Lewis Just, Lead Researcher

Understanding the barriers of nature-based data

A key reason for this gap lies in the complexity of nature data. Unlike carbon, which can be measured through a single metric such as tonnes of CO₂, nature spans many interconnected systems including water, soil, species, forests, and many more. Each uses different metrics, standards, and methods of measurement, making it extremely difficult to compare results across regions, sectors, or reporting frameworks.

Without harmonisation, financial institutions face a fragmented landscape where nature-related risks are hard to identify or value, and progress toward biodiversity goals is difficult to measure.

IB1’s approach brings structure and clarity to this complexity: developing guiding principles to support better quality, comparable, and decision-ready nature data that can help direct financial flows toward positive environmental outcomes.

Nature loss isn’t just an environmental issue, it’s an economic one

“Reducing nature data barriers is key to enabling effective nature-related reporting and accelerating action to halt and reverse nature loss.” (TNFD)

The impact of nature-related financial risk is widespread and financial institutions currently lack the data needed to measure and manage their nature-related financial risks. For instance, UK Banks could avoid potential losses of 4–5 % of loan-book value if they’re able to anticipate and price risks more accurately. For governments, making nature risk visible could help to avert $2.7 trillion annual GDP loss by 2030.

To unlock the power of nature data and positively shift financial investment, we need better access to high-quality, trustworthy nature data. But access alone isn’t enough, how that data is shared and governed is equally important.

Balancing openness with responsible governance

At first glance, it seems there’s a simple solution: make all nature data open and accessible, right? Unfortunately, it’s not that simple. And, in fact, not all data should be open.

For instance, sharing the precise locations of endangered species could make them more vulnerable to poaching. For example, GPS tracking data intended to help conserve rhinos could be exploited by poachers to locate the animals. Similarly, satellite-derived coral reef maps — created to support conservation — could be misused by developers and industrial fishing fleets to identify and exploit those same ecosystems.

That’s why responsible governance is crucial. Data providers must retain control and ownership over their datasets to prevent misuse and ensure that data serves its intended purpose: protecting and restoring nature.

NOVA (Networked, Open, Verifiable Architecture)

Our NOVA principles were developed to guide us to outcomes that are interoperable, scalable, and aligned with existing standards, ensuring that data can be shared and used responsibly.

Applied through the lens of nature data, this means that sensitive information, such as species locations, is only accessible to those granted explicit permission, safeguarding wildlife while still enabling actionable insights for conservation and investment.

COP30 Brazil

IB1’s principles and recommendations for this project were formed to help TNFD understand what good nature data looks like, so that financial flows can shift towards investments that help, not harm, the planet.

With COP30 in Brazil now underway, the spotlight turns to a country that holds some of the world’s richest biodiversity and largest nature datasets. At its launch event in São Paulo on Thursday, November 6th, TNFD published its recommendations for upgrading the nature data value chain for market participants. This included a blueprint to govern, launch, operate and finance a Nature Data Public Facility (NDPF).

Wellcome has now published the workshop summary report, Realising the potential of a National Data Library, which highlights key insights and recommendations from participants.

Our contribution to the report drew on our use-case–driven approach to delivering data infrastructure for net zero. This perspective was reflected in the final publication:

“Defining a strong vision for the NDL is necessary not only for intended users and the public but also to inform its design. “A clear vision is a necessary design constraint” for the NDL, state Hardinges and colleagues. They recommend documenting the vision as a “clear, tightly-bound problem statement. This will help bridge the chasm between a high-level political vision and technical execution.” Similarities can be drawn from the development of Open Banking in the UK, where the public were consulted about the problem they wanted addressed with their banking before the financial data innovation was designed.”

Realising the potential of a national data library: The Wellcome Trust

Read the full report here

The report explores the opportunities and challenges of sharing data across UK National Infrastructure Systems, with a particular focus on energy, water, and transport. Icebreaker One was proud to contribute to this crucial piece of work, undertaking a landscaping exercise to assess the current state of the art in data sharing in energy, water and transport infrastructure, particularly in regard to the support of research, with a focus on gathering evidence from the private and government sectors.

Read the full report here

You can find our landscape analysis on national infrastructure data sharing with researchers, which contributed to the above report, here

“Every government agency, everywhere, is working on a new system that’ll solve all data problems and will be ready to use in 18-24 months… Except it will always be ready in 18-24 months.” – Whong’s Law

In December, we submitted a response to the Wellcome Trust and ESRC’s National Data Library Technical White Paper Challenge.

The Challenge was designed to surface concrete implementation options for the proposed National Data Library (NDL). We responded to:

• Support UK Government to look beyond the abstract ideas and aspirations projected onto the National Data Library thus far. 
• Propose a feasible implementation option, based on how we approach data infrastructure for net zero at Icebreaker One.
• Describe significant challenges to delivery regardless of technical role/architecture, and ways to address them.

We’re delighted that our white paper, Delivering an effective National Data Library, was selected for publication. And, as we present our paper this week, alongside four other submissions, we wanted to publish a summary along with some further thoughts. 

Building from a strong foundation

In our response, we argued that there’s an urgent need for UK Government – as well as the wider pool of organisations seeking to influence its design – to:

• Clarify the technical problem the National Data Library should address. We decided to focus our work on a National Data Library aimed at improving the discovery of government-held data for research. We described the fork in the road between research and pursuing improved operational data access, on the basis that the needs of researchers and operational data users are unlikely to be met by this singular intervention. This feels vindicated, given the release of the UK Government’s blueprint for modern digital government, which commits public sector organisations to do various things to improve the way data is used to deliver public services (including using standard APIs to exchange data). 
• Take inspiration from existing research data infrastructures, rather than the library metaphor. We pointed to 11 types and 39 examples of data infrastructures that already serve researchers’ needs, such as by generating new datasets for research (UK Biobank), unlocking access to data held by the private sector (Smart Data Research UK) and providing access to linked or combined datasets from multiple organisations (ONS Integrated Data Service). The National Data Library won’t exist in isolation and must be built with an understanding that it’ll be one node in a network of research data infrastructures. 
• Ensure the National Data Library adds something new, or improves or replaces what already exists. In addition to these existing research data infrastructures, there are numerous pan-government initiatives working to improve public sector data access. We argued for these initiatives – plus the Library’s intended users – to be engaged early, in order to understand the needs not met by existing efforts.

Our recommendation for the National Data Library

We recommended a simple, decentralised National Data Library to improve discovery of public sector data for research.

In the spirit of the Challenge, we laid out how it could maintain a searchable catalogue (or ‘index’, ‘registry’, ‘portal’; the name doesn’t really matter) of metadata harvested from across many public sector organisations. It wouldn’t copy or store any of the research data those organisations hold, but provide a service to help researchers find relevant datasets wherever they are on the web. It would look similar to Open Net Zero, which we’ve built to make net-zero data discoverable, accessible and usable. Open Net Zero currently indexes metadata on nearly 60,000 datasets from more than 400 organisations.

To do this, this National Data Library would harvest existing metadata from sources like data.gov.uk, gov.uk API Catalogue and Administrative Data Research UK Data Catalogue. It would also collaborate with public sector organisations to make available and harvest new metadata. It would point to datasets that are openly available, as well as datasets that researchers can work with under more restricted technical, legal and commercial conditions. While we described various technical challenges – including varying quality and machine-readability of metadata, and unclear data licensing terms – we think this represents a feasible version of the National Data Library.

There’s also some interesting things happening with metadata and data discovery that the Library could build on. This includes: new metadata formats emerging from the AI community (Croissant); ways to tag datasets with information about restrictions on their use (Data Use Ontology); and new tools that enable users to search across multiple data catalogues and within datasets on them (Open Data Deep Search, HerdingCats).

Data curation must begin with users and use cases

At Icebreaker One, we start with use cases and deliver data infrastructure to enable them. The starting point for Perseus, for example, was to automate high-quality sustainability reporting for every SME in the UK to enable them to access over $100bn of green finance. We’re focusing on unlocking half-hourly emissions data to do this, before we add further use cases and data types.

This is how complex data infrastructures are built. As John Wilbanks of the Astera Institute recently described, “You build a complex data system by answering five questions at a time, using a standards based approach. And then when you’ve answered twenty, you’ll have a functioning complex data system”. We must design data infrastructures for specific primary use and general secondary use.

We recommend the National Data Library takes a similar approach. While original research is needed to clarify its intended users and their needs, we pointed to existing evidence on use cases that the Library could address. This includes: 52 societal challenges hindered by a lack of coordinated data (DARE UK); high level areas of research interest (HM Treasury); and high-value datasets for reuse (European Commission).

The Library can’t be a vehicle for everything

The ambiguous language used around the National Data Library has caused confusion. The UK Government’s AI Opportunities Action Plan has recently described the National Data Library as “an enormous opportunity”. It says that ‘alongside’ the National Data Library, the UK Government should:

• “Run open calls to receive proposals from researchers and industry to propose new data sets”.
• “Rapidly identify at least 5 high-impact public datasets it will seek to make available to AI researchers and innovators”.
• “Establish a copyright-cleared British media asset training data set”.
• “Finance the creation of new high-value datasets that meet public sector, academia and startup needs”.

These could well be useful interventions to make to support the UK’s AI sector. But in order to give the National Data Library a necessary focus, the UK Government should be clear about the wide set of interventions it plans to make for the data economy vs the subset that will be delivered by the Library itself. 

The limits of our recommendation

While it’d help improve data discovery, we’re conscious that our recommended execution of the National Data Library wouldn’t move the dial when it comes to streamlining access to research data drawn/linked from multiple public sector organisations.

We compiled evidence that this is the significant challenge holding researchers back from working with public sector data in the UK, including from Administrative Data Research UK, the Public Administration and Constitutional Affairs Committee and the Office for Statistics Regulation.

It’s a very difficult problem to address. We pointed to Ben Goldacre’s 2022 review of the UK’s health data ecosystem, which identified a wide range of barriers to more effective linkage or combination of data for research in health alone. It described how individual data holders operate in silo, developing their own, bespoke approvals processes that make secure data linkage and access neigh on impossible.

The review made 30 detailed recommendations. We suggested that a similarly broad and deep set of interventions will be required to harmonise access to data for research across the whole of the public sector. We think this work is broader and deeper than is possible for the National Data Library to deliver, and that progress on streamlining access to research data will instead be driven by other actors. At a recent event held by Health Data Research UK, Sir Robert Chote, Chair of the UK Statistics Authority, described progress being made on a number of fronts. This included: the Office for National Statistics’s Integrated Data Service; reexamining the Five Safes framework to consider accrediting Safe Programmes rather than only Safe Projects; and the work of the Pan UK Data Governance Group.

Our view and recommendation has also been shaped by budget considerations. We anticipate that investment in the National Data Library will be modest and less permanent in comparison with other public data infrastructure: the ESRC alone has spent more than £200m in data collection, creation, curation and delivery.

Moving forward

Our recommendations for delivering an effective National Data Library have been shaped by our use-case driven approach to delivering data infrastructure for net zero. As we present our paper this week, we hope the UK Government will consider our suggestions as they develop further plans.

In collaboration with Digital Catapult’s Digital Supply Chain Hub, Icebreaker One worked on a project to help transform UK manufacturing through data-enabled supply chains. This work culminated in a final report titled ‘Data governance systems for supply chains’.

Executive summary

The Made Smarter Innovation | Digital Supply Chain Hub initiative delivered by Digital Catapult aims to better connect supply chain stakeholders in order to improve efficiency, reduce costs and contribute towards the UK’s net-zero targets. Connection between stakeholders relies on building trust within and throughout supply chains. The development of a robust data governance framework for the Digital Supply Chain Hub ecosystem has the potential to transform supply chains by promoting trust as well as enhancing financial accessibility, streamlining technical interoperability, enabling innovation and investment in technology, and driving sustainability.

To take this abstract concept and prove its efficacy, this project focused on defining one specific use case within the food supply chain, through engaging deeply with stakeholders and then creating an MVP to establish the data infrastructure for trusted data sharing. 

Doing one thing well 

Our defined use case focuses on one of the most significant inputs for UK farmers: fertilisers. Fertilisers are a significant driver of global greenhouse gas emissions, accounting for 2.6 gigatonnes of CO₂e annually—more than the emissions from aviation and shipping combined. 

Farmers have substantial potential to reduce the emissions associated with fertiliser use. Studies suggest that global fertiliser emissions could be reduced by as much as 80% by 2050 through measures such as optimising application techniques, adopting precision agriculture, and transitioning to organic or low-emission alternatives. 

At the same time financial organisations, such as banks, are interested in understanding their financed emissions within agriculture as well as financing the transition to sustainable farming practices. To do this effectively, financial organisations require access to trustworthy data from the food supply chain. However, current methods of sharing data from farm to financial organisation can often be manual and inconsistent. This creates additional costs and inefficiencies as well as risks regarding data quality. 

Governance to go further together

With a complex, multi-stakeholder problem, it’s critical that solutions are defined together. For this project, Icebreaker One (IB1) used its governance mechanism to create an advisory group representing stakeholders from across the food supply chain. The group then helped to define our use case and steer the direction of travel for our technical MVP including the proposed rules to enable data sharing in an open, automated, scalable, decentralised and interoperable way.

Building better trust in data

Assurance is a person’s confidence in the reliability or trustworthiness of something, based on evidence or predefined standards. Assurance Signals can be attached to data using metadata that gives evidence for how trustworthy the data is. Machine-readable assurance signals make this process efficient by allowing computers to quickly verify and assess the data’s trustworthiness.

The project’s MVP builds a model of how assurance signals can be used to provide a higher degree of trust when it comes to farm’s fertiliser reduction, that flows from a farm management system through to a carbon accounting platform and on to a financial organisation like a bank. This creates value for multiple stakeholders, not least unlocking green financing opportunities for farmers.

The potential for impact

The development of a robust data governance framework for the Digital Supply Chain Hub ecosystem has the potential to transform UK agriculture by promoting trust, enhancing financial accessibility, and driving sustainability. It aligns with net-zero ambitions while supporting the resilience and productivity of UK farms, ultimately contributing to a more secure and sustainable food supply chain.

Recommendations

In order to fully implement a data governance framework we recommend to:

• Validate assurance signals: UK arable farmers and their supply chain actors must be engaged in order validate assurance signal feasibility.
• Establish a full governance framework: An Advisory Group must continue to be convened to ensure the co-design and implementation of a market-wide solution, which addresses specific user, technical and non-technical requirements.
• Onboard demonstrator partners: Relevant partner organisations from the supply chain must be brought together to deliver a demonstrator that shows assurable data flowing from farm to bank.
• Co-design implementation of a technical demonstrator: Relevant partner organisations must co-design and establish the data infrastructure, including assurance metadata records.

As a potential solution to this, the report acknowledges the value of Perseus. Recognising the project’s value in offering a reliable model for data sharing, the report views Perseus as a potential bridge for the property sector’s data gap. What’s more, with the Perseus pilot fast approaching, the project serves as an inspiring example, holding the potential to accelerate decarbonisation in the property sector and beyond.

The energy data deficit

The property sector’s data deficit is nuanced. While owner-occupiers are able to access energy consumption data with relative ease, the same can not be said for tenant and landlord, where the sharing of data is far more restricted. According to the report, this is due to privacy laws that limit data-sharing capabilities and make it difficult for landlords to gather and track energy usage effectively. The issue becomes especially problematic when considering that over half of UK commercial real estate and one third of the residential sector are tenanted.

The report explains that “within the energy sector, Ofgem has identified licensees who are subject to data sharing regulations, which does not typically include property owners. This results in a situation where there is currently no legislation requiring the exchange of energy consumption data between property owners and occupiers.”

Perseus

With this in mind, the report indicates the need for a framework that facilitates data sharing, looking to Perseus as a prime example. If Perseus’s model of facilitating data sharing between SME and bank could be applied to the real estate sector, then data from tenants could be securely shared with landlords, ensuring energy consumption is monitored and decarbonisation efforts are tracked.

“(Perseus) demonstrates that setting up a governance framework and automated processes to build trust between stakeholders and to facilitate data sharing is possible from the perspective of the finance and banking industry. A similar framework could also be applied to the real estate sector to facilitate data sharing between tenants and their landlords, while ensuring that the data will be shared securely and used for the sole intended purpose of enabling the net zero transition.”

The review also looks at initiatives that are instrumental in our transition to net zero, with project Perseus being one of these. Perseus aims to lead the market down a path of enhanced data access, streamlined reporting and improved compliance with standards. By ensuring that quality data on SME emissions is readily available, Perseus seeks to address a critical gap and remove one of the many obstacles we face on the path to a low-carbon economy.

Financial flows

Spotlighted in the review is the UK’s strength in sustainable finance and its ability to accelerate our path towards a low-carbon economy. Despite this, the trajectory of transition finance towards our net zero future is being held back by high emitting sectors like heavy industry and agriculture, both of which face a significant investment gap.

And, while private capital is seen as a key catalyst for transition, real economic policy and public finance will be required, providing the market with confidence, mitigating risk, and allowing private finance to flow. As the report echoes, “Finance will ultimately flow to where markets believe there is future profitability”.

Data to unlock transition finance

Data – underpinned by assurance and verification – is set to play a central role in our transition plans, particularly when informing financial decisions. The report points out that the past five years have seen an increasing focus on bringing the right data and disclosure to the market. This, for the time being, has been centred around securing information from large companies. In the UK, for example, mandatory TCFD*-aligned disclosures apply primarily to listed companies and large private businesses.

And, while some smaller businesses have started to adopt disclosures voluntarily, a substantial data gap persists for SMEs, who often form the backbone of larger companies’ supply chains. The importance of measuring SME emissions should not be understated, considering they account for around half of the UK’s private sector turnover and business emissions. And yet, the review notes that a coherent, ambitious and forward-looking strategy for addressing issues related to SME data provision and access is currently lacking from the UK Government’s framework: “So far, there has been generally limited focus on how to support and encourage SMEs to develop transition strategies and disclose information in a structured way.”

Project Perseus

Icebreaker One has long recognised the burdensome process of carbon reporting that SMEs face as well as their integral role in our transition to net zero. Through one of our flagship projects, Perseus, we will help unlock access to finance that reduces emissions faster. We aim to do this by automating sustainability reporting for every SME business in the UK.

By automating primary data access we will ease the challenge small businesses face in finding and sharing the data they need to produce sustainability reports. This allows banks, for whom better data means lower risk, to offer SME clients favourable conditions, providing an incentive for SMEs to report their emissions.

“Perseus has the potential to provide personalised net zero recommendations for SMEs and match these recommendations with financial products to increase access to transition finance. SME participation is secured through engagement with existing suppliers (banks and accounting solutions), and data sharing permission is managed in a manner similar to open banking.”

*The Financial Stability Board has announced that the work of the TCFD has been completed, with the ISSB Standards marking the ‘culmination of the work of the TCFD’.

The report entitled ‘SME Finance Taskforce – Smart Data: improving SME lending to drive economic growth’ outlines a 7-point plan that hinges on Smart Data:

1. Prioritise the Digital Information and Smart Data Bill
2. Fund and support an SME “Smart Data Challenge”
3. Review and improve HM Treasury’s Bank Referral and Commercial Credit Data
   Sharing (CCDS) schemes
4. Accelerate reform of Companies House, in particular standardisation and verification
   of Company information such as directors’ names
5. Unlock private sector data by providing information from HMRC e.g. digital receipt of
   VAT owed to match and verify cloud accounting data. In addition, allow greater
   access to HMRC data for approved organisations
6. Develop and consult on proposals for an e-invoicing scheme for the UK to align with
   overseas markets
7. Enable greater trust in using new specialist lenders e.g., through industry initiatives.

Access the full report here.

This in-depth report details Icebreaker One’s work during the Alpha Phase of the project with a specific focus on data sharing, accessibility and interoperability. It explores three core pillars of work:

• Reviewing the data landscape supporting NIMBUS
• Evaluating dataset applicability to NIMBUS
• Convening expert input to guide the project and ensure transferability to the wider energy sector and beyond.

Download our data accessibility and interoperability report here

The REACT project is funded by energy network users and consumers through the Strategic Innovation Fund (SIF), a programme from the UK’s independent energy regulator Ofgem, managed in partnership with Innovate UK. The project’s partners are Scottish and Southern Electricity Networks (SSEN) Transmission, National Grid Electricity Transmission, SGN, Olsights, MapStand and Icebreaker One.

Access the report here.

The report shares insights into market trends, costs, and the challenges SMEs face in carbon reporting. It aims to help businesses navigate carbon reporting and support their transition to net zero. It includes extensive research, covering over 270 carbon reporting solutions as well as in depth results of surveys and interviews of SMEs and solution providers. You can find the full long list of carbon reporting solutions here.

Access our comprehensive report here

The report features:

• Comprehensive list of solutions on offer: A detailed overview of 270 carbon reporting tools available, segmented into 10 solution types
• Guidance on choosing the right solution: Advice tailored to the specific needs and scale of a business, helping SMEs navigate through the plethora of options.
• Key considerations: Insights into what SMEs should look for in a provider, such as cost-effectiveness, ease of use, data accuracy, and scope of emission coverage.
• Learnings from other businesses: Real-world examples and insights directly from SMEs who have navigated and implemented carbon reporting solutions.
• Future trends and developments: Analysis on emerging trends in carbon reporting and how they might impact SMEs

How to get involved:

• Sign up to our newsletter to receive the report and updates from IB1
• Learn more about Perseus, the programme enabling automated emissions reporting for every SME in the UK.
• Get in touch to contribute and connect: research@ib1.org

Perseus home page

Join us for an enlightening webinar, designed for UK small and medium-sized enterprises (SMEs). We’re delving into the comprehensive report by Icebreaker One, commissioned by the British Business Bank. This session will empower you with the knowledge and tools needed to understand carbon reporting and will help you to find the right solution for your business.

Report: https://ib1.org/ecosystem/2024-carbon-reporting-solutions-report/

Video recording

What You Will Learn

• Extensive Solutions Catalogue: Explore over 270 carbon reporting tools, systematically categorised into 10 distinct types.
• Personalised Guidance: Receive expert advice on choosing solutions that align with your business’s size and requirements.
• Essential Provider Criteria: Gain insight into key factors to consider when selecting a carbon reporting solution, including cost, user-friendliness, data accuracy, and emission coverage.
• Success Stories: Learn from the experiences of other SMEs who have successfully implemented carbon reporting solutions.
• Future Outlook: Stay ahead of the curve with updates on emerging trends and how they’re shaping the future of carbon reporting for SMEs.

Why Attend?

This webinar isn’t just about understanding the landscape of carbon reporting; it’s about enhancing your business’s journey towards sustainability and net zero goals. Whether you’re starting your carbon reporting journey or looking to refine your strategies, this webinar is the key to unlocking your potential.

Event Details

Dates: Thursday 8th February 2-3pm | Thursday 15th February 12:30-1:30pm

Location: Zoom link, sign up on Eventbrite

Who Should Attend?

This event is ideal for SME owners, sustainability managers, and anyone interested in the intersection of business growth and environmental stewardship.

Please read the PDF of the Stream Blueprint Phase Executive Summary here(v 2023-02).

Stream is a sector-wide initiative enabling a scalable, repeatable approach to Open Data in Water. Stream aims to bring benefits to the water sector and beyond by establishing a widely accessible open data platform and associated governance and data standards, with a vision to unlock the potential of water data to benefit customers, society, and the environment. 

Working as a collective comprised of 11 water companies and 6 partner organisations, Stream has worked through phases to define the strategy and co-create an open data framework for the sector. The latest phase has produced this Blueprint, mobilising nine workstreams to gain a deep understanding of requirements, develop a detailed design for Stream, and identify timings, costs and requirements for the subsequent Implementation phase.  

Read the full report here

If you have any questions about our submission or require clarifications please do not hesitate to contact us via openenergy@ib1.org.

Overarching questions

2. What challenges and obstacles have you identified to decarbonisation?

Icebreaker One believes trusted data sharing and digitisation at national scale are core challenges to driving to net zero. 

Accurate, trustworthy data that informs net-zero actions is essential to decision-makers across finance, industry, government and beyond. It will help derisk financial instruments, accelerate new technologies to market and enable monitoring against science-based targets.

The businesses we work with have expressed an urgent need for better data to inform strategic investment decisions, understand supply chains and assess the impact of their decarbonisation efforts. As decarbonisation is a multi-sectoral challenge, relevant datasets are limited in availability and come from a wide range of sources and can be hard to find, procure or utilise. With a better data sharing infrastructure, businesses can move faster to decarbonise, with more informed confidence, less risk and lower costs.

Challenges identified:

• Data does not flow effectively between organisations
• Instead of being connected and networked in an open ecosystem, data is siloed
• Most organisations believe that the correct approach to solving this challenge is to ‘build a portal’, which risks keeping data siloed in a range of different databases instead of networked. This prevents informed decision making

Icebreaker One believes that this is not a technology problem. It is a commercial, political, and cultural challenge. 

We propose the following recommendations: 

• Use open standards for data sharing 
• Address which data need to be shared, why, how, by and for whom
• Anchor around common rules that address user needs (search, access, use) 

Data sharing at national scale requires a clear strategy to design the marketplace(s) across which data will be shared. The UK Government has a major role to play in that market design. 

An open market helps unlock discovery (search), access (processes), and usage (licensing), for both Open data and Shared data. We strongly recommend applying the following core principles:

1. Design for search: Making data discoverable means designing for search
2. Connect don’t collect: Accessibility requires addressing structure and connectivity of data
3. Address user needs: Addressing data usability means addressing data licensing around use-cases and user needs

3. What opportunities are there for new/amended measures to stimulate or facilitate the transition to net zero in a way that is pro-growth and/or pro-business?

Icebreaker One’s extensive research has shown that for the UK to hit its national targets, it is necessary to both de-risk investment and make impact both measurable and accountable. This will require facilitating access to commercial data using low-friction, secure, trusted networks. It first requires a focus on open access and, in addition, data that is in the national interest must be published for access by anyone using Open Data licences. Examples of open standards for data sharing include Open Finance, Open Banking, Open Energy, and insurance and asset-level innovation such as the Standard for Environment Risk and Insurance (SERI).

Improving access to data for UK businesses will deliver commercial benefits and growth, in the same way that Open Banking has accelerated the growth of the UK fintech sector. 

The opportunity to deliver an open marketplace for commercial data incentivises the whole value chain because businesses thrive with better access to data. Open standards help to create open marketplaces for commercial and open data: rapidly expanding proven sector trust frameworks (e.g. that support the finance sector) to find, access and use data; to create incentives, improve decision making and radically increase transparency.

To deliver a demonstrably Net Zero future requires cultural changes to institutional frameworks of data sharing and access (governance, regulation, transparency). For example, a regulatory mandate focusing not only on what to disclose but also on how to disclose it. A trust framework can inform mandates for policy and regulation, as well as legal, operational and technical standards for interoperability. Such approaches also stimulate commercial innovation in analytics, data science and technology providers, subsequently increasing innovation, optionality and competition in the market.

Icebreaker One is engaging with the sectors that have the greatest impact on our climate and environment and creating a market architecture for data, based on the Icebreaker Principles: https://ib1.org/icebreaker-principles. Organisations (e.g. Arup, Open Data Institute) are signing up to endorse these principles.

4. What more could government do to support businesses, consumers and other actors to decarbonise?

Icebreaker One recommends taking the following steps to enable our Net-Zero Future:

1. Recognising that trusted data is essential to delivering net zero
   Accurate, trustworthy data that informs net-zero actions (‘net-zero data’) is essential to decision-making across finance, industry and government. It will help derisk financial instruments, accelerate new technologies to market and enable monitoring against science-based targets.  

2. Mandating that access to net-zero data be open
   Data must be made discoverable and accessible to those who need it.  To unlock public and private sector benefits, the ability to effectively share data (using Open or Shared licences) across sectors is essential. This includes finance, agriculture, water, transport, energy and the built world. Net-zero data must be machine-readable, and have open metadata to enable its discovery.

3. Ensuring the rules for data sharing address public and private sector needs
   To enable access to data, the definition of the rules used to share it requires participation from diverse actors. Data owners need to be able to control who can access it in a manner that addresses commercial, legal and regulatory requirements. Robust policies and standards can also support assurance and auditing, therefore enhancing trust.

4. Ensuring net-zero data infrastructure is governed openly and independently
   To maintain an open market, data infrastructure must include public and private sector actors in its design, implementation and enforcement. A market-neutral Trust Framework is a preferred approach to developing such data infrastructure and includes remits of data governance, policy, licensing, technical and operational codes and principles. This infrastructure needs to be developed, and iterated upon, at a pace that is relevant to the urgency of the issues being tackled. Both its processes, and outputs related to its implementation, should be openly licensed.

5. Creating mandates for engagement
   To create a level playing field, close data gaps as rapidly as possible and address the public interest, Government and regulators should define rules for access to specific net-zero data, mandate participation in data sharing and drive adoption. Similarly, industry initiatives can define rules for specific industry benefits, and act as catalysts to adoption. Common policies and open standards must create mandates for machine-readable data, data access processes, access control and mechanisms for enforcement that unlock data flow. 

6. How should we balance our priorities to maintaining energy security with our commitments to delivering net zero by 2050?

Maintaining energy security and net zero requires a coordinated understanding of where energy is being used, where it can be reduced, and how this relates to network supply and distribution. Current modelling, while advanced, does not have the right quantity, quality, diversity, granularity and time resolution to maximise the benefit for the whole system. Industry, Government and consumers need better access to data and information to help reduce risk, increase efficiency and maximise resilience.

The government’s energy security strategy further underscores the importance of energy data to achieving national targets^,.

The challenge is to improve energy security in both supply and efficiency (reduction of consumption): to accelerate switching to a new energy mix; reducing energy use across the UK (domestic, public and commercial); to ensure economic stability and in the short term alleviate the cost-of-living crisis. 

The gap is that there are many different systems and models across organisations that make secure, resilient and repeatable sharing of trusted data difficult. An opportunity exists to accelerate the Energy Digitalisation Task Force (EDiT) recommendations, increase resilience and unlock innovation. Convening around this challenge requires public and private sector collaboration, across sectors (e.g. Electric Vehicles). 

Understanding systemic options that could help address this

We acknowledge that there will be issues regarding pricing, availability, flexibility and pressure on demand. To address this, collaboration will be required between the DNOs to have a clear view on energy supply and demand, including a better understanding of where there is demand vs flex capacity. It will require coordination between government, industry and consumers to both reduce demand and to increase production.

We recommend taking the following actions in order to enable government and industry to understand the priority data gaps that stand in the way of addressing current exposure and delivery of the energy strategy:

1. Bringing together expertise by convening relevant stakeholders in a coordinated, agile, time-bound and results-based programme;
2. Identifying specific use cases that can deliver solutions that can be addressed through better data sharing, and could include where data could aid government and regulator decision making (through stakeholder engagement and research);
3. Identifying the data and information needed (both presumed open data and secure data);
4. Building reusable data infrastructure (including that which requires higher security levels) needed for the data sharing to take place in a trusted framework (e.g. Open Energy https://openenergy.org.uk);
5. Analysing and reporting on Open Energy’s data sensitivity classes so that the work can be repeated, replicated and scaled across related sectors (eg. electric vehicles, water);
6. Benchmarking current practices and reporting on improvements, evidence and outcomes that support decision-making and institutional memory, aligned with the national interest. 

Questions for businesses

9. What barriers do you face in decarbonising your business and its operations?

The businesses we work with have expressed the urgent need for better (accurate, trusted, interoperable) data to inform strategic investment decisions, understand their supply chains, and assess the impact of their decarbonisation efforts. As stated in question 2, because decarbonisation is a multi-sectoral challenge, these datasets come from a wide range of sources and can be hard to find, procure or utilise. With a better data sharing infrastructure, businesses can move faster to decarbonise, with more informed confidence, less risk and lower costs.

Utilities face particular challenges in mobilising the data within and outside their businesses to accelerate their drive to net zero. We have covered this in detail in our response to question 6.

In the financial markets, Environmental, Social and corporate Governance (ESG) data has become a crucial tool to both deploy capital to sustainable projects and businesses, and to identify climate-related risks in portfolios and the wider financial system. Our work as part of the Future of Sustainable Data Alliance (FosDA) has identified more than $500B of worldwide capital deployment through ESG-integrated funds. Companies seeking this capital investment will increasingly be required to evidence their ESG commitments, but there is a lack of coherence in both disclosure and ratings that makes reporting arduous for the companies, especially where they operate across different jurisdictions. FoSDA is working to harmonise the data critical to ESG investment deployment and monitoring.

Questions for local government, communities and other organisations delivering net zero locally

25. What has worked well? Please share examples of any successful place-based net zero projects.

Our Icebreaking initiative convenes organisations and their stakeholders in a neutral environment with a focus on specific obstacles to net zero  that can be addressed with tangible actions. Working with stakeholders, we identify priority value cases, map out the data value chain, and prioritise actions and steps which empower organisations to create a concrete plan for their delivery. Core to this process is open engagement promoting collaboration with the sector, for the sector and by the sector. 

Throughout this process, we have worked with a number of organisations to facilitate the identification and execution of their local net zero projects. Some examples include:

SSEN

Icebreaker One worked with SSEN to identify and tackle data silos and develop data-sharing opportunities to facilitate electricity networks in managing the additional electricity demand caused by the uptake of electric vehicles (EVs).  First, a specific use case was prioritised to allow focus on a tightly defined scope, then a workshop was held to develop and vote on action proposals related to the prioritised use case. The workshop was so successful that plans are being made to unlock budget to further develop the top voted proposal.

OZEV

Icebreaker One partnered with the Office of Zero Emission Vehicles to research and address the data gaps required to roll out thousands more electric vehicle charge points across the UK. A priority use case focussing on on-street parking availability was chosen. 

Local authorities are faced with the challenge of working out how to deliver this infrastructure in a timely, efficient, equitable and cost-effective way, while ensuring ‘location optimisation’. The focus on a single use case allowed for directed research, engagement, and participation in the project by external data controllers,consumers and local authorities. Participating in a workshop, local authorities along with DNOs brainstormed concrete actions that could be implemented locally. 

27. How can the design of net zero policies, programmes, and funding schemes be improved to make it easier to deliver in your area?

We propose improving, evolving or creating funding mechanisms that address needs that fall in between explicit government and commercial interests. 

There are roles for non-commercial entities to deliver insights, activities and services that address public-private needs. This is particularly appropriate in emerging and evolving markets such as data and digitalisation, where there are new risks of commercial monopolies, and new opportunities to stimulate innovation and growth. 

Net Zero brings specific new challenges around cross-sector data sharing. For example, electric vehicles require combined digital efforts across transport, energy and the built world.  

Approaches such as these can unlock material value to the economy through the creation of open markets (for example Open Banking, which the UK instigated, is creating a $100B+ market). 

Questions for academia and innovators

29. How can we ensure that we seize the benefits from future innovation and technologies?

Our research and technology development as MEDA competition winners (Open Energy project) strongly suggests that the development of Shared data infrastructure is of high importance to the role of data and digitalisation in enabling net zero. We recommend that future investment in the ecosystem of net zero data should focus on specifying a unified approach to sharing types of data that do not meet the criteria to be published as Open data.

We suggest that a future approach builds upon the industry-tested foundations developed through the Open Energy trust framework in order to implement a clear and consistent approach to Shared data governance which can support an ecosystem of commercially, socially and environmentally valuable Shared data. We recommend that this includes:

• The establishment of a system of data sensitivity classes, to improve consistency in sector understanding and categorisation of Shared data. 
• The implementation of a standardised approach to Shared data access, based on a standardised range of access conditions, to enable flexible governance of data access within well-defined parameters.
• The introduction of a standardised approach to Shared data licensing, based on a standardised range of licence conditions, to enable flexible creation of licences within well-defined parameters.

30. Is there a policy idea that will help us reach net zero you think we should consider as part of the review?

Icebreaker One has conducted extensive sector research supporting the creation of the Open Energy trust framework, including inquiry into whether this framework should mandate common standards for licensing, metadata, and data quality. 

From our research, we recommend mandating data sharing to make data work harder to deliver net zero, with the following priorities:

1. General demand for data-sharing between regulated and non-regulated stakeholders stems primarily from Shared data, not Open data. Open data alone will not be sufficient to achieve net zero. Data exchange between regulated and non-regulated stakeholders for net zero purposes/projects is also primarily driven by Shared data, not Open data. This concerns data shared by and to regulated entities. We recommend that future investment in the net zero data should focus on specifying a unified approach to sharing types of data that do not meet the criteria to be published as Open data.

2. Adoption of standardised licences for Open data should be prioritised. Research demonstrated that creation of bespoke ‘Open’ data licences present risks to data usability, by increasing the overheads (time, financial, legal) of interpreting non-standardised licences and/or by permitting data publishers to create licences which do not actually produce Open data (either through error or evasion). Rather than creating a new licence for this purpose, we strongly suggest that Government mandates data sharing via existing well-known licences (e.g. Creative Commons, Open Government Licence or similar). In order to minimise unnecessary conflicts which could surround the choice of a single Open data licence, as well as the burden of change for organisations that have already adopted different but well-known standard Open data licences, we suggest that Government specifies a limited set of well-established standard Open data licences that must be used to publish Open data.

Additionally, we suggest that the following net zero data policies are not enacted:

1. Adoption of metadata standards is a highly politicised topic associated with low feasibility of reaching industry consensus on a ‘single’ standard. At present, there are significant differences between standards used by different actors across sectors. We suggest that mandating a single metadata standard risks producing inadvertent barriers to the publication of Open Data. Instead, a focus on unlocking discovery, access and interoperability can help address user needs.

2. Adoption of data quality standards for Open data is highly contested, particularly for historical datasets and those influenced by legacy technologies. We propose that there would be value in offering support for organisations around two key issues associated with poor data quality: transparency and improvement. This does not need to be extensively technical, however it should aim to help data publishers ‘troubleshoot’ common quality issues prior to publication and thus to improve the baseline of Open data quality. For example, this could address common issues flagged within the Open Energy project, such as missing units of measurement or use of notation/acronyms without adequate explanation.

There has been an explosion of terms, initiatives and acronyms over recent years as climate change has risen to the top of the agenda, accompanied by confusion between concepts such as ESG (‘Environmental, Social, Governance’), ‘sustainability’ and ‘net zero’. There is confusion about what these acronyms and terms mean, who is involved and how they all relate to each other. 

Icebreaker One is working to enable net zero data to flow, and in doing so, help to bridge the gaps between organisations, initiatives and their outputs. We have a common goal to make data more discoverable, accessible and usable to support net-zero decisions.

In many conversations, we find there is a lack of clarity about what is happening, who is involved and how things are evolving in a highly diverse and complex ecosystem.

The aim of this post is to shed light on “What is going on? Who’s who and what’s what?”. 

With a bias towards sustainability finance within the UK and the EU (and this is by no means exhaustive) we highlight some of the significant actors, acronyms and activities currently in motion as the world scrambles to achieve net zero by 2050. 

Climate disclosures and frameworks

Part of the commitment by the EU to limit and neutralise carbon emissions (European Green Deal), the SFDR (Sustainable Finance Disclosure Regulation) is a broad ESG disclosure requirement for companies and products in the EU. It uses the language of the EU Taxonomy regulation, which provides the classification system needed to describe climate and nature-related economic and investment activities. For corporates, the EU’s Corporate Sustainability Reporting Directive (CSRD) lays out which organisations need to comply and what to disclose in order for more capital to be invested in climate-positive, sustainable and net-zero activities. The EU Sustainability Reporting Standard is being developed by the European Financial Reporting Advisory Group, EFRAG, which provides the technical expertise and guidance needed for the reporting standard. 

Using input from discourse frameworks such as the globally adopted GHG Protocol for calculating carbon emissions (built on the Kyoto Protocol classification system of greenhouse gases), as well as TCFD (Taskforce for Climate-related Financial Disclosures, a  global framework for disclosing climate risk and opportunities, which is now mandated by law to qualifying organisations) and TNFD (Task Force for Nature-related Financial Disclosures), which will provide a global framework that addresses risks and opportunities for the natural world and biodiversity. 

Regulatory requirements and climate change law

A regulatory requirement since March 2021, SFDR forms a core pillar of the EU Sustainable Finance agenda, a pan-European policy objective to create a more sustainable future and reach the legally binding international treaty on climate change (the Paris Agreement), brought to the forefront by the scientific and socioeconomic analysis by the Intergovernmental Panel on Climate Change, IPCC. While the IPCC is an independent scientific, technological and socioeconomic institute formed by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP), the goal of the Paris Agreement is to limit global warming to “well below 2, preferably to 1.5 degrees Celsius”, compared to pre-industrial levels by countries to decarbonise their economies and reach net-zero emissions by 2050, many countries of which have now enshrined into law.

Standards Boards for disclosures

The current leading internationally adopted sustainability disclosure standard is from The Global Reporting Initiative (GRI), established in 1997 after the Exxon oil spill disaster to create more transparency and accountability around organisational activities and their impacts on the environments they operate in. More recently, the ISSB, the International Sustainability Standards Board, is creating a global disclosure standard for sustainable finance disclosures, published by the IFRS (International Financial Reporting Standards) foundation. It was formed through a consolidation of the IFRS foundation, the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF) outputs. CDSB provided the foundation for FSB’s (Financial Stability Board) TCFD framework while the Value Reporting Foundation VRF spearheaded the Integrating Guiding Principles, Integrated Reporting Framework and the SASB (Sustainability Accounting Standards Board) standard. The International Sustainability Accounting Standards Board (IASB) is also working in collaboration with SASB (all under the ISSB banner) to drive forward the Integrated Reporting Framework. GRI and ISSB are also collaborating to align both objectives and accelerate the adoption of sustainability reporting. 

How does this relate to net zero?

We’ve mentioned the GHG Protocol and how the GHG calculation framework inputs into regulatory reporting such as SFDR and TCFD. Net zero is mainly captured within the “Environmental” category of ESG and sustainability disclosures (the others being Social and Governance), so “carbon accounting” primarily involves accounting for carbon emissions, which is the first step needed to develop a plan to decarbonise to net zero emissions. Carbon accounting is different to “financial accounting” in the traditional sense, although accounting standards boards and authorities (e.g. ICEAW), and the recommended frameworks mentioned above are working to make carbon accounting, and associated climate risk, an integral part of overall financial accounting disclosures and processes.  

Getting to net zero 

The Science Based Target Initiative, SBTi, a science-based net-zero pathways initiative, uses the carbon footprinting calculated through the GHG Protocol framework and provides the scientific pathway and framework for planning an organisation’s pathway to net zero through sector-based scenarios, helping guide planning and reduction strategies for all types of organisations. These science-based targets are based on scenarios derived from a variety of academic and related sources and provide YoY reduction targets in line with “Well Below 2℃” (WB2C) and 1.5℃ scenarios. A collaboration between Initiatives such as CDP (the global carbon disclosure and reporting mechanism for organisations, cities and countries which holds a variety of disclosure data from these actors), WRI and UN Global Compact, SBTi provides the authoritative guidelines and disclosure mechanisms for companies for emission calculations, Green House Gas reporting, and forward-looking target setting.

Other net zero initiatives and guidance

SBTi provides validation for organisation’s net zero commitments and targets for certain sectors. While there is guidance for financial institutions, the UN-approved Race to Zero is a coalition of different net zero initiatives, many of which focus on different sectors and industries not covered by the SBTi. Some of these financial services net-zero initiatives involved include the Net Zero Asset Managers Initiative (NZAM), Net Zero Asset Owners Alliance (NZAOA), and Net Zero Banking Alliance (NZBA), some of which have united under the banner of the Glasgow Financial Alliance for Net Zero, GFANZ. Others in GFANZ span insurance, financial service providers as well as investment consultants. These initiatives are forums for financial services actors to make commitments, receive guidance on action and share knowledge on how to decarbonise their activities in line with net zero targets and channel their allocations (or business activities) towards sustainable and net zero investments. Almost all initiatives do however reference SBTi (and therefore GHG Protocol) as an authoritative way to account for GHG emissions, as well as the above-mentioned TCFD and sustainability accounting standards for climate risk and accounting disclosures. 

The data ocean 

There seem to be many frameworks and disclosure standards, so what’s the data issue? 

Within the financial marketplace, data is used not just for regulatory disclosures, but also for investment analysis, which requires a variety of data including mandatory and voluntary disclosures, financial performance and ratings as well as external data (e.g. from company-specific and national energy consumption, product materials and embodied carbon information, the government published data such as from the Office of National Statistics ONS in the UK, and even weather and imaging data from earth observation from sources such as the Met Office, European Space Agency, NASA, amongst other). Vast data coverage is required for financial institutions to assess where emissions come from and where to action, as well as for assurance and validation, to realistically and demonstrably channel capital towards achieving net zero. 

There are specialised third-party data services (such as Bloomberg’s BNEF, S&P’s TruCost or Morningstar’s Sustainalytics) to benchmark and verify ESG or sustainability claims, but there is often a need for organisations to access the ‘raw data’ that some third parties and companies use for their calculations or to make disclosures due to insufficient data transparency, availability and/or quality. These data providers also amass a wide variety of other data, such as company and country performance and ESG indices provided by the likes of MSCI, and Bloomberg Indices, as well as ratings from rating agencies such as Moodys and S&P amongst others to verify financial stability and benchmarking for to financial institutions such as banks, credit providers and insurance companies. Public listed organisations’ performances and rankings are also provided by some of these indices providers above, as well as stock exchanges such as NASDAQ and London Stock Exchange (part of LSEG, which is also now the parent company of index provider FTSE Russel as well as specialist ESG analytics provider Refinitiv), all which are significant disclosure and third-party data consumers. There are multiple and differing methodologies and frameworks even across organisations, with information silos and financial barriers to appropriate data. 

If we look deeper, other types of data providers offer specialist risk/exposure analytics and loss or catastrophe modelling, used by banks and other financial institutions such as re/ insurers to calculate financial risks which look at hazards (flood, fire, storms, earthquakes, etc, all of which are increasing in frequency due to climate change) for exposure and vulnerability assessments. These include service providers such as Ambiental (now Twinn by Royal HaskoningDHV), RMS (now part of Moody’s) and AIR Worldwide (now part of Verisk) as well as the open source OASIS Loss Modelling Framework. (If you want to learn more about the insurance ecosystem, look here).

For the whole financial services industry, The Network for Greening the Financial Services initiative, NGFS has provided future scenarios for different use cases for financial services, including macroeconomic modelling, exposure, stress testing, etc. The Bank of England via the Prudential Financial Authority of England (PRA) is responsible for publishing annual financial scenarios for banks, building societies and insurers for future planning and stress testing, including the Climate Biennial Exploratory Scenarios (CBES) exercise for climate change risk, which was developed together with the Financial Conduct Authority via the Climate Financial Risk Forum (CFRF) that convened senior authorities within large financial organisations including asset managers and banks. They have been working with the NGFS to integrate climate change considerations into these scenarios. 

Where are all the underlying data coming from?

These reporting frameworks and standards have been instrumental in instigating action toward net zero, however, “net zero” is still a fairly new and bewildering concept to the many players that need to make net zero happen. How do we appropriately satisfy the guidelines and disclosure requirements? What data for this information is sufficient, of high enough quality (i.e. reliable) and in sharable or interoperable formats to be able to achieve this mammoth task of industrial and global decarbonisation? Are these specialist data providers sufficiently addressing the growing need for net zero data? 

As mentioned above, the GHG protocol was established to address the need to calculate and clearly understand how greenhouse gases are produced and from where through business and regional-level activity. But this framework came from a global collaboration of nations, scientists and academia as well as economic actors over years of action to bring to light the existence and severity of how our fossil fuel-based economy has led to climate change and its devastating impacts. There is still a pressing need for underlying data to be made available and shared which can help all actors to understand, manage, monitor and most importantly collaborate and act on their net zero goals. 

Carbon or GHG accounting – estimating GHG emissions 

The GHG protocol provides guidance on how to calculate emissions from specifically categorised ” “scopes ” (activities)through the use of conversion or “emission factors”. Government agencies and industry bodies (such as the UK’s Department for Environment, Food and Rural Affairs, DEFRA and the Internation Energy Agency, IEA), as well as the global IPCC, publish recognised, authoritative emissions factors to calculate emissions from these activities (such as the ‘average’ carbon emissions from electricity drawn through the UK energy grid, or the emissions produced by the processing of materials such as steel and cement). Other databases such as Ecoinvent and Sphera’s GaBi LCA databases also exist for more specific conversion factors. All of these databases use a variety of sectoral and scientific data to publish these factors, and some are accessed through a paywall whereas some are publicly available (e.g. DEFRA and IPCC). 

DEFRA also publishes the UK’s carbon footprint through consumption data and derives emissions factors from a variety of sources such as industry or sectoral data, Energy Network Operators and energy consumption, scientific institutions and other international agencies or academies. DEFRA also provides information on air quality, food, farming and biosecurity and other data, such as that collected and published by the Environment Agency and the US Environment Protection Agency, US EPA. Equivalent bodies in other jurisdictions also publish this data but use a variety of data sources and information to do so, with the frequency of such updates varying widely, and always backwards-looking (for example, DEFRA publishes emission factors once every year). Additionally, these factors (and other such data used for emissions estimations) to be used with actual consumption or industry-averaged data are sometimes not relevant or even available for the multitude of activities that exist and therefore need more information, of higher quality and better frequency to be made available. 

Data frameworks, standards and net-zero data 

The task of bringing all of these data points and information together cannot be underestimated. One of the biggest challenges is where this data is stored, how to access it (paywalls and security), whether they are sharable and comparable, how these data are presented, the differing formats, taxonomies and frameworks as well as differing data standards involved. 

The solution to this big challenge is to make existing data sources searchable, accessible and sharable to all actors in order to achieve net zero. Established and widely adopted data standards, such as the leading standard for business reporting, XBRL, could be leveraged to create a common language for net zero data. Organisations such as Linux foundations’ OS-climate are using the principles and best practices of open source and interoperability to share climate models and tools for a variety of stakeholders (governments, regulators, academics, corporations and others) in order to achieve net zero. The EDM Council is a global membership association that is elevating data management within organisations in order to make data integrity and interoperability possible across industries, countries and beyond. Its Financial Industry Business Ontology (FIBO) can be adapted to relate net zero within business and finance terms and corresponding relations, which drives forward machine-readability, interoperability and thus increase efficiency, sharability and federated data systems. The data and systems exist, but there needs to be a much greater focus on user needs and use-cases to unlock and bridge the data flows necessary for cross-industry and cross-border net zero action. 

Who is addressing these challenges and driving net-zero forward?

Icebreaker One is convening stakeholders to understand which data are required and how data can flow into these requirements using data sharing standards and principles established by existing mechanisms (such as the Open banking standard), to understand the data gaps and holes (e.g. the Future of Sustainable Data Alliance, FoSDA that explores what current financial data flows are needed, and the green taxonomies that exist or are lacking) that financial institutions can use for investment analysis and investment decision making for a net zero future.  Icebreaker One launched Open Energy through working with the UK’s energy industry to solve the need for better data availability, accessibility and data sharing as recommended by the Energy Data Taskforce. Open energy is based on the principles of data sharing highlighted via the success of Open Banking, through the establishment of a Trust Framework which has grown to become an example of how secure and scalable data sharing is possible. 

Many organisations are work to fund this complex ecosystem (e.g. through governments and research funding such as the UK Research Insitute, UKRI and EU’s Climate-KIC, or corporation-established foundations such as Bloomberg Philpanthropies, Climate Works, and Climate Arc) and helping to convene actors, produce research and insights and incubate or test solutions around critical topics.

What’s next?

The vast ecosystem described in this post is but a snippet of the nascent and continually evolving net zero and climate action landscape. It is still unclear whether the multiple standards, frameworks and initiatives can demonstrate real net zero action without the provision of the data necessary (or access to it) to quantify and verify claims. A clear way to address this is through the availability of net zero data — searching a trusted data ecosystem where any and all actors can search for, identify and access trustworthy data needed to operationalise, achieve and verify their net zero goals. By demonstrating such a data-sharing ecosystem can not only work but can drive innovation and change forward (c.f. Open Banking and Open Energy), Icebreaker One’s ambitions with net zero data may well be the change we need to genuinely achieve net zero in the brief time we have left to act. 

Linked initiatives

• Carbon call
• Future of Sustainable Data Alliance (FoSDA)
• Climate Arc (workshop outputs)
• Bankers for Net Zero (UK All-party Parliamentary Group)
• Net-Zero Data Public Utility
• Climate Action Data 2.0
• IB1 Constellation

On Wednesday, June 29th, Icebreaker One and Climate Arc held a London Climate Action Week event in collaboration with Chatham House, focussed on the role of open data and open standards for net-zero financial decisions and in the climate transition. With over 60 experts and practitioners in the financial, investment, and data analytics sectors, attendees helped identify key gaps and innovative solutions to bring climate science into mainstream investment decisions. 

Register your interest to be involved
in future events and conversations

The world of climate data is increasingly complex and challenging to discuss given the range of different organisations and initiatives involved and the rapidly growing demands from the finance sector. Above is a simplified version of Climate Arc’s ongoing mapping of the flow of climate data – from corporates to financial institutions.

A broader view of the ecosystem, including real and financial data economy data, and models, is below:

The key themes and actions that emerged were:

Finance needs better access to net-zero data

• An open data and open standards approach would enable a clear ‘demand signal’ to be sent from the financial sector back to corporates, connecting net-zero financial decisions to the real economy. Users of climate data should be able to ‘see’ where climate data comes from and what methodological steps and estimates have been applied.
• This would require a set of rules and processes so that climate data is transparent, machine-readable and trusted. It could be achieved, for example, via a new Open Climate Data Standard. A federated, web-based approach could allow stakeholders to ‘connect’ rather than ‘collect’ – accelerating action. 
• Whilst broad consensus exists over the need for open climate data, the different models and language for frameworks, disclosures, taxonomies and licensing (e.g. open license vs open access) are leading to some confusion among stakeholders. 

Engagement is key to shaping an open climate finance data ecosystem

• There must be engagement with stakeholders on the ground and those actually dealing with a challenge and may know what data is needed.
• This should be a wide-reaching, actionable conversation, with global stakeholders.
• There is a well-defined challenge in gathering data from emerging markets where data is lacking. Individuals, organisations and representatives from emerging markets should be directly involved in this process. 

The data needs to be consistent, transparent, and credible 

• The data needs to be consistent, with clear standards which are transparent and credible. 
• The data will need to be auditable, verifiable information to be usable in financial decision-making.
• There could be a common platform for modelling and sharing estimation methodologies to promote consistency in analysis, once the data infrastructure is in place. 
• Increased transparency is needed on estimate methodologies to have accurate financial disclosure analysis. 
• Clarity is required on the different frameworks, disclosures, and taxonomies so stakeholders can make informed decisions. 

Well-defined metrics and open data allow for comparison

• There is value in agreeing upon and developing specific metrics to be able to compare and contrast between organisations and hold them to account. 
• Having open and accessible climate data allows for all further analysis to be grounded in a single source of information.

Why did we run the event?

Currently, access to much of the world’s financial data for assessing and measuring the transition to net-zero is restricted in some way. It is essential to unlock the data flow by creating processes, policies, and guardrails that make sure data is comparable, machine-readable, and trusted. Opening up data and using Open Data reduces the friction in a wide range of use cases for climate-related financial data. A federated, web-based approach for accessing open data allows practitioners to connect rather than collect required datasets. This is aligned with our Icebreaker Principles (open to comment).

This event convened key data providers and users to discuss the ambitious future with open climate data at the heart of innovative solutions. In preparation for the event, Climate Arc developed an ecosystem map of the current market and how data flows between them. This was then used as a basis for two workshops during the event. The first workshop session challenged attendees to think through what is missing and what solutions are needed. The second workshop asked participants to think through what principles should be considered to deliver an operational open climate finance data ecosystem, and how to achieve widespread adoption. 

Register your interest to be involved
in future events and conversations

Resources:

Please find the event briefing note, ecosystem map, slides and workshop materials below:

• Event Briefing – Pre-read note
• Data definition and market architecture for data — positioning slides open version [or PDF version]
• Report on the market architecture for non-financial / ESG data sharing
• Climate Arc PDF summary