Meeting the Needs of the Sustainable Finance Sector: Informing the Kaitiaki Intelligence Platform Design

This report outlines the environmental reporting data sought from the sustainable finance sector. It identifies the types of reporting data that could be automatically generated by a Kaitiaki Intelligence Platform to support various forms of environmental reporting to secure sustainability linked loans and investments. Furthermore, it explores the opportunities for Māori to access this finance, and sell environmental data to the finance sector for sustainability reporting.

The Kaitiaki Intelligence Platforms (KIPs) project is a Māori-led initiative aimed at designing the Kaitiaki Intelligence Platform (KIP), an environmental sensing network that provides near real-time environmental intelligence to Māori governors and land managers. This network's data could meet the finance sector's increasing demand for detailed environmental information, which is crucial as firms face stricter environmental standards and regulations. These regulations not only affect firms' profitability but also pose financial and reputational risks to investors, who are now more insistent on transparent disclosure of environmental footprints. The KIP has the potential not only to supply environmental data to the financial sector, to generate income, but also to support Māori postsettlement governance entities (PSGEs) and Māori Land Incorporations and Trusts (MALITs) in demonstrating the sustainability of their enterprises, thereby attracting investments and loans under favourable conditions.

The report outlines the history and current state of the sustainable finance sector both globally and in Aotearoa New Zealand (NZ), focusing specifically on the financing mechanisms and evaluation frameworks most pertinent to the primary sector. This includes an examination of environmental, social, and governance (ESG) frameworks, currently in use or under development, which are critical for screening investment decisions and for post-investment protocols such as performance evaluation, active engagement, and auditing by investors. In-depth analysis of the themes, indicators, and metrics utilized within the ESG frameworks is also undertaken. The literature review synthesizes this information to offer general insights for the KIP design, particularly regarding data generation for the finance sector and understanding the disclosure requirements that PSGEs/MALITs need to meet to secure sustainable finance.

This report also incorporates the analysis of interviews with 19 finance sector actors including asset and fund managers, impact investors, NZ bank lenders, software platform providers, and regulators. It evaluates the future value of KIP data to these different users and scopes the current barriers that limit the adoption of automated environmental sensing data being within the sector. The report concludes with an outline of the design process and next steps for the KIPs project to meet finance sector needs.