• 72% of financial institutions plan to spend up to $500,000 on ESG technology.
• Regulatory compliance and risk assessment are major challenges in ESG.
• Climate risk challenges include regulatory stress testing and GHG accounting.

Over 72% of financial institutions plan to invest up to $500,000 in ESG (environmental, social, and governance) technology, according to a recent survey by BCT Digital.

BCT Digital, a leader in FinTech, RegTech, and SustainTech solutions, conducted this survey in collaboration with Chartis Research. The survey titled “Chartis Market View: ESG and Climate Risk Survey” reveals how global financial institutions are integrating ESG and climate risk factors into their risk management and investment decisions.

The survey gathered insights from 77 ESG and climate risk practitioners from financial institutions with assets under management (AUM) ranging from $1 billion to $500 billion. These institutions are based in APAC, North America, Europe, and the MENA region. The findings indicate that over 72% of these institutions plan to invest up to $500,000 or more in ESG technology.

Most firms review their ESG strategies quarterly, with North American and European institutions likely to exceed the $500,000 mark annually. The average spending ranges between $250,000 to $500,000.

Challenges in ESG and Climate Risk:

The survey highlights significant challenges in ESG and climate risk management

• ESG Challenges: 52% of respondents cite regulatory compliance as their primary challenge, followed by risk assessment at 48%.
• Climate Risk Challenges: Meeting regulatory stress testing expectations (67%), accurate Greenhouse Gas Accounting (56%), and integrating climate risk operationally into product lines (50%).

Related Article: Deloitte Survey: 77% of Executives Report Sustainability Progress, but Data Quality Challenges Persist

Jaya Vaidhyanathan, CEO of BCT Digital, commented on the survey results, stating, “We are happy to present this survey that uncovers trends, challenges, and priorities within the ESG and climate risk space, addressing questions such as the evolution of technology markets, demographic impacts on risk planning, and the primary drivers of firms’ strategic agendas. There is a lack of uniformity in sustainability and climate risk reporting standards; different countries may have their own frameworks. This disparity makes it challenging for multinational corporations to maintain consistent reporting. We are ready to tackle the growing needs of the ESG and climate risk markets, and based on this survey, confident about addressing the intersection of these two fields.”

This investment trend reflects the increasing importance of ESG and climate risk factors in the financial sector, driven by regulatory pressures and the need for robust risk management frameworks.