What is ESG data?
ESG data is important extra financial information, not disclosed in standard financial reports. It is related to environmental, social and governance factors used to access the sustainability of companies and investments.
Who collects it?
ESG disclosures are compiled from a variety of sources. Including third party ESG rating agencies, company reports, regulatory filings, and sustainability reports.
The quantity and quality of ESG information has improved over recent years but it can still be difficult to make direct data comparisons.
It is hoped that a standardised reporting framework will be available in the near future.
In the UK, the FCA is developing a “world leading and competitive regime that will help the UK’s asset management sector thrive by setting standards that improve the sustainability information consumers have access to.” This is known as Sustainability Disclosure Requirements.
Why is ESG reporting important?
Investors and consumers are placing increased emphasis on the sustainability of companies, requiring the reporting on environmental, social and governance activities. These disclosures can be used to evaluate the investment risks and opportunities of companies. In conjunction with financial reporting, its provides a more rounded picture of financial resilience. This in turn helps financial professionals and investors make better informed investment decisions.
Download our ESG Data infographic
ESG information is extra financial, and helps provide a more rounded picture of the long term resilience of companies. Download our infographic to find out more.