Datafication of Sustainable Finance

38 Pages Posted: 3 Jul 2024

See all articles by Dirk A. Zetzsche

Dirk A. Zetzsche

Universite du Luxembourg - Faculty of Law, Economics and Finance; European Banking Institute

Marian Unterstell

Universite du Luxembourg - Faculty of Law, Economics and Finance

Ross P. Buckley

University of New South Wales (UNSW) - UNSW Law & Justice

Douglas W. Arner

The University of Hong Kong; The University of Hong Kong - Faculty of Law

Date Written: June 28, 2024

Abstract

In the wake of the Paris Agreement of 2016, the EU Sustainable Finance Action Plan of 2018 and the EU Green Deal of 2019, the ongoing implementation of the EU's Sustainable Finance Strategy has led to a significant development of EU law with a view to financing and facilitating the transition of the real economy towards sustainability. We argue first that this strategy, at its core, is a data strategy, requiring the datafication of the entire European financial, production and services sector. By taking into account sustainability data, the ongoing process of datafication prompted by digitalization of finance will extend to data concerning externalities previously not incorporated into quantitative financial models and analysis. Second, we look at other datafication processes in finance to identify regulatory lessons for the EU's sustainable finance framework. On that basis we present policy recommendations with a view to furthering datafication of sustainable finance by way of financial regulation. In particular, we recommend the implementation of digital reporting standards developed in tandem by industry and regulators, the utilization of Green RegTech and SupTech, centralized and enabled via digital reporting infrastructure such as the European Single Access Point, and the facilitation of the use of official estimates to ensure proportionality.

Keywords: Sustainable Finance, Datafication, Financial Regulation, Taxonomy, CSRD, SFDR, Sustainability, ESG, FinTech, RegTech, SupTech, Digitalization

Suggested Citation

Zetzsche, Dirk Andreas and Unterstell, Marian and Buckley, Ross P. and Arner, Douglas W., Datafication of Sustainable Finance (June 28, 2024). UNSW Law Research Paper No. 24-19, Available at SSRN: https://ssrn.com/abstract=4879687 or http://dx.doi.org/10.2139/ssrn.4879687

Dirk Andreas Zetzsche (Contact Author)

Universite du Luxembourg - Faculty of Law, Economics and Finance ( email )

Luxembourg, L-1511
Luxembourg

HOME PAGE: http://wwwen.uni.lu/recherche/fdef/research_unit_in_law/equipe/dirk_andreas_zetzsche

European Banking Institute ( email )

Frankfurt
Germany

Marian Unterstell

Universite du Luxembourg - Faculty of Law, Economics and Finance ( email )

4, rue Alphonse Weicker
Luxembourg, L-2721
Luxembourg

Ross P. Buckley

University of New South Wales (UNSW) - UNSW Law & Justice ( email )

Sydney, New South Wales 2052
Australia

Douglas W. Arner

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01237

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