What are the primary data challenges faced by responsible investors?
Over 100 portfolio managers, climate risk executives, and data management executives participated in the ESG Data Acquisition & Management Survey 2023 conducted by Bloomberg and Adox Research in March 2023.
The survey aimed to understand the approach and philosophy toward ESG data within their organisations. Their main takeaways include:
- The main challenges in ESG data management include handling evolving data content (55%), managing multiple vendor feeds (50%), and linking ESG content to existing entity data (48%).
- 45% of portfolio managers mention ESG data being table stakes and 44% claim access to ESG data is critical for differentiation purposes.
- ESG benchmarks and indices (24%), ESG factors (19%), and ESG scores (17%) are the top-priority product areas for ESG data spending.
- Data quality is the most crucial criterion for selecting an ESG data provider, followed by breadth of coverage, cost, integration ease and support service.
- Respondents report a significant increase in ESG data spending, with 92% of executives planning to increase their ESG data spending by at least 10% and 18% planning an increase of more than 50%.
- Over 70% of firms take an ad hoc or decentralised approach to acquiring and managing ESG data, with only 29% having a firmwide approach.
- The cloud is the preferred technical delivery option for ESG data for 85% of respondents, reflecting the need for efficient data management solutions.
The survey's focus on larger firms may not fully represent the challenges smaller firms face with fewer resources for ESG data management.