With focus on being green, Red Hat wants to simplify finding data on climate change risks
Red Hat, the Raleigh-based open-source software giant, wants to make it easier for the public to access good data on what risks climate change will bring to businesses in the future.
The technology company said this month that it will start providing technical support for OS-Climate, an open-source project backed by the nonprofit Linux Foundation and includes other backers like Amazon, Goldman Sachs and Microsoft.
A massive trove of data is now being produced and revealed from companies around the world about their vulnerabilities to climate change. But all of that data is stored on disparate sources, from SEC filings to science journals, making it incredibly time consuming to access all of it.
OS-Climate hopes to create a platform that brings all of that relevant data together in one place, so that companies, investors and members of the public can access the extremely valuable data in one open-source place.
Red Hat is providing technical resources to the project, and is committing eight solutions architects, data engineers and software engineers to it.
A push for climate change data
Regulators continue to push companies to reveal to the public how climate change could hurt their business models. In June, the Securities and Exchange Commission began preparing to make companies tell the public more about how they are responding to threats from climate change and reveal facts like their total greenhouse gas emissions, The Wall Street Journal reported.
Already, roughly 90% of the companies in the S&P 500 send out voluntary reports disclosing statistics on their climate impacts, according to The Wall Street Journal. But the information they disclose isn’t consistent and there’s not a clear standard on what should be included. Additionally, companies get to choose what they consider to be risks to their business models.
The information, as well as other important data points from other sources, isn’t always easily accessible to the public.
Kelly Switt, senior director for financial services industry strategy at Red Hat, said climate risk data, at the moment, is very opaque. She’s hopeful that OS-Climate can bring more transparency to the public about how climate can shape the future of the economy.
“A data commons (for this information) is such an important endeavor, because it really needs to be like a utility service, if you will, to the industry so that everyone’s not having to try to do this on their own,” Switt said in an interview with The News & Observer.
“Having a pre-competitive data layer that allows varying institutions, whether they be private sector or public sector, to use this data is a huge step in the right direction to help thinking about how to size the risk of climate change,” she added.
Seeking sustainably run companies
There should be plenty of interest in the data.
Investment companies and their customers are increasingly looking for greener and more environmentally-friendly places to put their money. Environmental, Social and Governance (ESG) funds have exploded in recent years, taking advantage of investors’ growing desire to invest in more sustainably run companies in the face of climate change pressures.
More than $51 billion of investor money went to ESG funds in 2020, a record amount, according to CNBC.
Switt noted that if investors had better information about which companies are contributing to or lessening impacts from climate change, it could change where money is invested. Most investors and companies, OS-Climate believes, are currently overexposed to climate-related risks and under-invested in companies that are providing climate-change solutions.
It’s about “how you take (climate change) into consideration when looking at pricing future markets (or) pricing assets that you have within your portfolio that you and I, as investors, whether it’s through our pension funds or 401k funds, are putting our money into,” she said.
But the fact that the data will be publicly available, Switt added, will mean it can be used for an unknown number of purposes, from research to education.
Switt said an initial platform for the data could be ready by the end of the year.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
