Lombard Odier senior managing director Patrick Odier spoke about the growing field of sustainable finance and the need for better impact reporting to drive greater investor demand.

Although sustainable finance continues to experience rapid growth – green bond issuance in the first half of 2021 tripled to over $800 billion, according to Refinitiv data – the standards and quality of impact reporting are lagging and creating hurdles for investors or their advisors. 

«We are in a world where impact really will be of the essence,» said Lombard Odier’s Patrick Odier during a panel at this week’s Singapore Fintech Festival. 

«That means we need to rationalize a process within which companies and issuers, in general, do report about impact.»

Reporting Standards

In addition to making impact reporting the norm, Odier highlighted the need to establish other norms such as the digitization of such reports to improve the ease of access for investors and investment advisors.

Odier also noted a need for harmonization, if not standardization, of reporting across taxonomy and methodology, underlining related efforts by the International Capital Market Association (ICMA) to reconcile varying approaches.

«Today, the impact reporting space is extremely fragmented and leaves a lot of space for education which creates, in turn, confusion in the world of investors,» he said. «indeed, for instance, an issuer could attribute 100 percent of a project's impact to a green bond that was issued [even if] only 50 percent of it was being financed by this green bond.» 

Tech in Impact Reporting

And in the spirit of the week-long fintech event, Odier shared how emerging technologies could also enhance the field of impact reporting.

Examples include big data and natural language processing, which could improve analysis of impact reports, or the use of geospatial data, which could verify the preservation of a specific site.

«This new type of data validation can bring a lot more financing to those projects and in this sense, it is a tremendous help and accelerator to impact finance,» Odier added.