Published by Jessica Weisman-Pitts
Posted on November 4, 2024
Mark Tabor, Principal Consultant, Ordnance Survey
By Mark Tabor, Principal Consultant, Ordnance Survey
In today’s dynamic financial services landscape, understanding the connection between location data and Earth Observation (EO) technologies is becoming increasingly important. As part of the UK Space Agency’s Unlocking Space for Business initiative, a feasibility study by Ordnance Survey (OS) has illustrated how precise, comprehensive location data can drive informed investment decisions—particularly in areas of sustainability and biodiversity net gain.
The financial sector faces persistent challenges in linking asset location data with risk assessment. This disconnect limits the effectiveness of EO data applications, which can be crucial for better understanding environmental, social, and governance (ESG) requirements. As sustainability concerns grow in prominence, financial institutions are under more pressure to respond. Yet, without a precise understanding of where assets are located, companies struggle to harness the full potential of EO data, leading to gaps in risk evaluation and investment insight.
By integrating OS’s trusted geospatial data with EO insights, we can create a robust framework that bridges financial services with their physical asset environments. This enables more effective monitoring of environmental impact, improves ESG compliance, and strengthens investment strategies tied to asset location.
Despite these opportunities, significant barriers remain. There is a lack of trust in location-based assessments, along with limited awareness of the benefits that space-derived insights can bring. Financial institutions are already spending millions trying to navigate a complex data landscape with limited success. Authoritative data platforms, like the EO DataHub, which is a single portal for accessing and processing satellite data, could be the catalyst for the widespread adoption of EO technologies across the financial sector, providing clarity of where assets are located for risk management and sustainability efforts.
OS has been working closely with the UK space sector to make EO data more accessible for the financial services sector. Through collaboration with initiatives like Space4Climate, the UK Space Agency funded feasibility study, and leveraging new EO technologies, OS has identified a critical need for improved understanding and interpretation of EO data within the financial industry.
The combination of EO and location data can significantly enhance due diligence, portfolio monitoring, and predictive analytics, transforming risk management in sectors including real estate, agriculture, utilities, and manufacturing. The OS National Geographic Database (OS NGD), for example, holds over 25 million land-use parcels. This vast data reservoir can be used to identify prime investment sites, assess flood risks, and evaluate land cover, providing detailed insight into a site’s potential risks and value.
“There are large gaps in terms of understanding what you can and cannot do with EO data,” says Mark Tabor, Principal Consultant at Ordnance Survey. “With a trusted organisation like OS providing data and expertise, financial institutions can unlock real value, enhancing their ability to track investments, identify vulnerabilities, and make more informed decisions. From funding climate-resilient assets to understanding climate-related risks, the potential for EO data to influence positive change is immense.”
Tracie Callaghan, Innovation Lead for Climate Data at NatWest, echoes this sentiment. “At NatWest, we’re exploring how EO data can help meet our environmental ambitions, fulfill regulatory obligations, and support our customers’ sustainability journeys. Tools like our ‘Explore Solar’ report generator have shown us what’s possible, providing our customers with solar potential insights within minutes.”
While the opportunities are evident, challenges remain. As Callaghan notes, “Better location data is key to maximising the practical application of EO data, unlocking its unique value for financial services.”
The applications for EO data in financial services are broad and impactful, from regulatory compliance and project financing to climate risk assessment and resilience-building. Geospatial insights can help identify environmental risks, monitor changes, and make portfolios more resilient to climate impacts. This not only gives firms a competitive advantage in ESG investing but also offers a proactive strategy for safeguarding assets from climate-related threats.
According to the United Nations, economic losses from climate-related disasters exceed USD 330 billion per year. Further analysis from the Green Finance Institute shows that 8% to 53% of the portfolios of the seven largest banks are exposed to transition risks. EO data could support financial regulators such as the Financial Conduct Authority (FCA) and the Bank of England in stress-testing scenarios, reinforcing the resilience of banks and insurers against future crises linked to climate and asset exposure.
“Harnessing precise location data alongside EO technologies is pivotal to transforming the financial services sector, financing more sustainable behaviours, and enhancing risk management,” notes Hannah Cool, COO of Bankers for Net Zero. She underscores the importance of data standards, saying, “We need clear data standards and open data sharing frameworks that mid-market players can adopt, as well as collective data-sharing agreements to tap into standardised asset-based information.”
The financial sector is witnessing a shift as more investors seek sustainability-linked opportunities. This demand for socially and environmentally responsible investments requires clear, data-driven evidence of impact. EO data, combined with geospatial insights, provides that essential verification, helping investors make confident, ESG-aligned decisions.
The integration of satellite EO data with location intelligence empowers financial institutions to align with net-zero targets, optimise resources, and guide investments toward climate-conscious strategies. Whether it’s monitoring greenhouse gas emissions or preventing environmental degradation, the transformative potential of EO data is vast.
EO data also opens avenues for sustainable investment in sectors like energy and mining. For example, monitoring environmental impact in these sectors can ensure compliance with sustainability standards. In real estate, EO data can refine asset valuation and market trend analysis by incorporating microclimate insights. EO data can even enhance global trade monitoring, combining Automatic Identification System (AIS) data with satellite images to track emissions and manage ESG risks in shipping and supply chains.
As the financial services sector evolves, the integration of geospatial and EO data offers a powerful toolset for more informed and sustainable decision-making. By closing knowledge gaps, promoting data standardisation, and fostering trust in EO-derived insights, the financial industry can mitigate environmental risks and seize new opportunities for nature-positive investments.
This integration will play a crucial role in driving sustainability and strengthening risk management, creating a more resilient and future-focused financial system. As technology advances, geospatial and EO data stand ready to guide financial services towards a future where economic success and environmental stewardship go hand in hand.
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