95% of buy-side firms are aiming to improve their ESG data management

Over nine out of ten buy-side firms across the UK, US and Asia Pacific are looking to improve their ESG (environment, social and governance) data management, with 80% hoping  to do this within the next year, according to a new report by Alveo, a  provider of cloud-based market data management services.

Canvassing 300 buy-side firms across the three territories, it also showed that 32% plan to so in the next six months.

The research found that US executives were most confident about a focus on improving ESG data management over the short term, with 36% seeking to enhance it over the next six months. This compared to just 28% of respondents in the UK,

Looking farther out, 90% of executives expect to increase their firm’s investment in ESG data over the next two years, with 57% overall anticipating an over 25% increase in that timeframe.

Almost all firms (98%) are using advanced analytics tools including AI and machine learning in their approach to ESG data management today, although just over a third or 35% are making extensive use of it.

Moreover, cost reduction is not high on the list when it comes to ESG priorities, with 39% instead citing data comparability, 37% naming data availability and the same number highlighting data usability among their top two.

For those that do decide to outsource ESG data management capabilities, the favoured models were Data-as-a-Service (31%), where a third party completes the data collection and validation, and hosting of the data collection and validation with the company’s own staff completing the data cleansing.

“The volume and range of ESG data sets has grown significantly to address different use cases and to supplement gaps in corporate disclosures.,” said Neil Sandle, head of product management at Alveo.

He added, “This means that investment management firms face a daunting integration task to ensure they have the complete picture. Firms need to ensure not only that their ESG data management is up to scratch, but that also that a clear approach to data ownership and governance is in place to handle future change and evolving business requirements.”

©Markets Media Europe 2022
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