27th June 2022 – More than seven out of ten (71%) of executives working for buy-side financial services firms across the UK, US and Asia say their organisation uses more than five ESG data sources. The average number of sources used by these businesses is 9.3, with the US using the most (9.7) and Asia with the least at 8.9.
These findings are among the highlights of new research commissioned by Alveo, a leading provider of cloud-based market data management services, polling executives working for buy-side financial services firms in the UK, US and Asia. In terms of ESG data set types, organisations across all three regions are using multiple types, but are utilising ESG ratings provided by third parties most. In all, just under three-quarters (74%) of respondents said that their organisations were using these ratings.
The most common response in all three regions is to have between 6-10 ESG data sources, with corporate disclosures being the least common data source cited. External ratings is the most common, with far more use of sentiment data in the US when compared to the UK or Asia.
57% of firms overall are currently using third party expert opinions on factual information such as carbon emissions, but Asia respondents have more frequently centralized ESG data management with 68% of respondents in Asia stating there is a dedicated and separate ESG team in place that owns this data, compared to 52% in the US and 46% in the UK.
What is clear is that firms need to cast a wide net to get the ESG data they require including external ratings, expert opinions and sentiment data to supplement corporate disclosures.
“Asset management firms are looking to materially ramp up their ESG data management to fast-track the supply of consistent, aggregated ESG content to different stakeholders. Firms are looking to make use of the latest technologies for ESG data analysis but material issues in data quality can hamper the effectiveness of these. Drawing on the services of an expert solutions provider and adopting Data-as-a-Service models may prove to be the best route to address these,” said Mark Hepsworth CEO at Alveo.
