Assessing asset geolocation: regulatory barriers, data challenges and recommendations to support nature-related risk and opportunity assessments across South America

Regulatory barriers, data challenges and how to overcome them

Global Canopy has launched a new report investigating financial institutions’ abilities to obtain critical geographic location data about the operations and supply chains of companies in their portfolios in Brazil, Peru, Ecuador and Colombia, as part of efforts to better identify and manage their risks and opportunities related to nature.

The report, Identifying regulatory barriers and recommendations for assessing asset geolocation in South America, was produced by NINT (part of ERM Group), and commissioned by Global Canopy, with funding provided by the Norwegian Agency for Development Cooperation (Norad).

The report comes at a pivotal moment for the business-nature interface, with the Taskforce on Nature-related Financial Disclosures (TNFD) framework launching recently (September 2023) and momentum growing among companies and financial institutions across the world to start adopting it.

Under the TNFD framework, local geographical context plays a crucial role in robust assessments of how financial assets are impacting the natural environment. The approach – LEAP (Locate, Evaluate, Assess, Prepare) – that the framework recommends companies and financial institutions take in identifying and managing their risks and opportunities related to nature, highlights the importance of obtaining geographic location data about their operations, supply chains and assets. However, a comprehensive understanding of asset geolocation is often highlighted as a significant challenge for financial institutions in assessing their nature-related risks and opportunities.

The new report has identified some key regulatory barriers and data challenges in Brazil, Peru, Ecuador and Colombia that hinder financial institutions’ ability to obtain and incorporate geolocation information on their financial assets into their decision-making processes related to nature. It also highlights good practices for disclosure and management of asset geolocation information across these biodiverse countries.

Further engagement between financial institutions and their clients will be vital to obtain the information necessary to robustly assess nature-related risks and opportunities. Financial regulators and environmental agencies also have key roles to play in empowering companies and financial institutions to overcome obstacles. To this end, the report makes recommendations for change, and proposes workable solutions, in each of the South American countries.

It additionally makes general recommendations for change across wider jurisdictions, including:

• Creating unified geolocation standards, facilitating easier data sharing and interpretation.
• Ensuring transparency in geolocation use, making clear the purposes of the data.
• Integrating nature-related geolocation information requests with climate-related requests, when financial institutions engage with their clients.
• Creating unified and organised data portals which aggregate available data.
• Ensuring clarity on data privacy protocols.

For comprehensive details of the regulatory barriers, data challenges and recommendations on how to overcome them, read the full report (in English). The report’s executive summary is also available in Spanish and Brazilian Portuguese.

Read the full report (EN)

Executive summary (ES)

Executive summary (BR PT)

Find out how to register your intent to start adopting the TNFD recommendations.