The lack of adequate data and models cannot be a reason to do nothing, however. It is each financial company’s own responsibility to develop their risk assessment methods. Collaboration and common understanding are needed to ensure that the analysis is fit and relevant for the purpose.
Once we identify the best practices for risk assessment, we can then talk about which tools can be used to incentivise sustainable investing. Green Supporting Factors (GSF) and Brown Penalising Factors (BPF) have often been under discussion.