The recent ‘ESG Data Acquisition & Management Survey 2023’, a collaboration between Bloomberg and Adox, has unveiled startling findings.
According to the survey, a staggering 92% of executives are readying themselves to increase their investments in ESG (environmental, social and governance) spheres, with at least a 10% hike anticipated. Going further, almost a fifth (18%) of these executives have set their sights on a boost of 50% or more.
Investment channels have become quite distinct. Leading the chart, 29% of funds are funnelled into ESG benchmarks and indices. This is closely followed by company-specific data (23%), ESG scores (20%), and sustainable debt (19%). The paramount factor for these firms when opting for an ESG data supplier remains the quality of data. Following this primary determinant, the breadth of coverage holds significant weightage.
An interesting facet of the survey lay in the firms’ introspection of their ESG expertise. A majority (64%) consider themselves as pioneers in the sector. Contrarily, almost a third (30%) feel they lag behind the industry norm.
Bloomberg’s global head of enterprise data content, Leila Sadiq, remarked, “Once categorised as an alternative data source, ESG data has quickly become integral to the value financial firms deliver to their clients. Executives are making significant strategic investments in ESG data acquisition and management to differentiate themselves and meet client and regulatory demand.”
However, the journey is not devoid of challenges. A considerable 70% of companies follow an inconsistent or decentralised ESG data sourcing and management approach. A mere 29% employ a comprehensive, firm-wide tactic. The ever-changing landscape of ESG data content (55%), balancing different vendor data streams (50%), and aligning ESG content with extant entity data (48%) emerged as primary hurdles. On the brighter side, cloud solutions are the preferred choice for 85% of firms in terms of technical delivery.
Adox Research’s research director and founder, Gert Raeves, opined, “While firms are planning for ESG data to become a part of mainstream data and research workflows, they realise that the age of ESG data behaving the same as other financial data sets has not yet arrived. In the interim, the emphasis lies on technical scalability and data transparency.”
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