Unlocking the value of ESG data

ESG (environmental, social and governance) investments have been progressing at fever pitch in Asia. Morningstar reported that the total ESG assets in the region reached US$25.4 billion by end of 2020 - a 131 per cent increase on the previous year.

With such a flood of funding heading into the market, fintech providers have an opportunity - arguably even a responsibility - to help build a strong foundation for the market as it moves into the mainstream.

Right now there are significant barriers to adoption. In an Economist Intelligence Unit study in Asia, it was found that almost all ESG challenges are data-related, one way or another. A significant number of respondents cited inadequate access to ESG data (32 per cent), lack of clarity around ESG standards or metrics (30 per cent) and inconsistent ESG ratings (26 per cent) as obstacles to further ESG integration. As the study rightly pointed out, "the question of progressing ESG investment in Asia is inextricably linked to the data".