ESG Data Gaps Pose Challenge to Financial Institutions, According to Survey from Acuity Knowledge Partners
Survey participants managing over USD12tn express concern about lack of ESG standardisation and data integrity amidst heightened regulatory scrutiny
28 October 2021, London -Acuity Knowledge Partners(Acuity), a leading provider of bespoke research, analytics and technology solutions to the financial services sector, today released the results of its first annual global survey of key Environmental, Social and Governance (ESG)-focused investors and advisors across the US, Europe and Asia-Pacific. The analysis is based on responses from senior decisionmakers representing mutual funds, insurance companies, investment banks, private equity firms, commercial banks and pension funds totalling USD12tn in assets under management. The survey reveals insights on how financial institutions are incorporating ESG factors, ranging from preferred ESG strategies and team structures to opportunities for third-party ESG service providers and the use of technologies such as artificial intelligence in ESG analytics.
“The general consensus is that investors are struggling to access reliable and material ESG-related data,” said Robert King, Acuity’s chief executive officer. “While this is not a new challenge for the industry, it is increasingly important to financial institutions as ESG investing comes under greater scrutiny. Access to quality data continues to halt progress for a lot of companies navigating ESG integration.”
A majority of respondents considered ESG integration as their principal investment approach and identified access to reliable and material data as the foremost challenge, while 38% compounded that concern with worries about the lack of standardisation and data consistency and 37% felt they struggled with a lack of forward-looking data.
Demand for talent in ESG research has increased tremendously to resolve these issues: 80% of responses reflect that their organisations are building dedicated in-house ESG teams and over 50% of respondents even expect expansion of their in-house ESG teams.
With increasing demand for transparency and calls for regulatory changes to ESG analysis, Acuity’s survey results emphasise the importance that financial institutions and corporations act now to address the lack of ESG data and standardise ESG reporting methodologies.
Paul Alapat, chief product officer at Acuity, remarked, “Reliance on third parties highlights the data gap that persists even for companies with dedicated in-house research teams. With better techniques for analysis and increasing use of technologies such as artificial intelligence and natural language processing, ESG offerings of third-party services providers are expected to improve. We expect continued demand in this space and predict growth in ESG-driven investments, supported by increasingly integrated partnerships between in-house and third-party teams.”
To read the full survey report, visithttps://www.acuitykp.com/annual-survey-of-esg-investors-and-advisors-2021/
About Acuity Knowledge Partners
Acuity Knowledge Partners is a leading provider of bespoke research, analytics and business intelligence to the financial services sector. The company’s network of analysts and industry experts, combined with its advanced data and technology, supports over 400 financial institutions and consulting companies worldwide to operate efficiently and unlock their human capital, driving revenue higher and transforming operations. It specialises in investment banking, investment research, private equity and consulting and commercial lending. Acuity is headquartered in London and operates from 10 locations worldwide. In 2019, the company was established as a separate business from Moody’s Corporation, following a management buyout backed by Equistone Partners Europe. For more information visit www.acuitykp.com.
Gyanendra N Pati Director,
Head of Marketing and Communications Gyanendra.Pati@acuitykp.com