Executives Plan Significant Increases in ESG Data Spending, Survey Finds

A recent survey conducted by Bloomberg and Adox Research reveals that more than 90% of executives plan to significantly increase their spending on Environmental, Social, and Governance (ESG) data this year. The survey collected responses from over 100 portfolio managers, climate risk executives, and data management executives across North America, Europe, the UK, and the Asia Pacific region.

Key findings from the survey include:

• 92% of executives plan to increase ESG data spending by at least 10% year-over-year.
• Over half of respondents anticipate a spending increase of at least 20%, and 18% expect a growth of 50% or more in ESG data spending.
• ESG data is considered a key competitive factor, with 45% of respondents viewing access to ESG data as necessary to keep up with competitors, and 44% believing it’s essential for competitive differentiation.
• Only 1% of respondents consider ESG data as not very important for their product or marketing strategy.
• 64% of respondents see themselves as ahead of their competitors in terms of ESG capabilities, while 28% believe they are behind.

The survey also highlighted the top priorities for ESG data spending:

• ESG benchmarks and indices (24%).
• Company-reported factors (19%).
• ESG scores (17%).

Data quality was identified as the most critical criterion when selecting an ESG data provider, followed by coverage breadth, cost, and ease of integration.

In terms of ESG data management approaches:

• 29% of respondents use a firmwide approach.
• Over half rely on a decentralized framework managed by individual business lines.
• 18% use an ad hoc approach with no formal process.

Challenges in managing ESG data include the constantly evolving nature of ESG data content, managing multiple ESG vendor feeds, and linking ESG content to existing entity or instrument data.

The findings reflect the growing importance of ESG data in the financial industry and the increasing recognition that ESG data can provide a competitive advantage. However, the challenges of integrating and managing diverse ESG data sources remain a key concern for many organizations.