The thorny issue of managing ESG data
Given the lack of standardised metrics and ratings, it is important for investment managers to first identify the purpose for which their data will be used.
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W ITH demand higher than ever for Environmental, Social and Governance (ESG) products, investment managers are competing at a fierce pace both to innovate with new products and to integrate ESG screening into existing funds. And ESG data can deliver important insights into risks and potential of investment opportunities, and will therefore continue to evolve as an integral component of the investment decision framework.
Within the framework, the first requirement for investment managers is to identify their ESG data use cases. Will the data be used to profile risk, for example, or identify alpha? Or will the data help drive environmental engagement and stewardship with corporates? Clarity is important because each purpose requires its own approach to data analysis and impact output.
The challenges of ESG data management
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