Insights from the Bloomberg European ESG Data Survey 2024

The Bloomberg European ESG Data Trends Survey 2024, conducted during the ESG Tech & Data global roadshow between September and November 2023, has provided invaluable insights into the priorities, challenges, and data management strategies of ESG professionals across Europe.

This comprehensive analysis encapsulates the survey's key findings, spotlighting regulatory requirements, climate risks, data quality, and the evolving landscape of ESG data management.

Bloomberg's ESG Survey - Overview and Methodology

The survey spanned seven major European cities, including London, Stockholm, Geneva, Amsterdam, Frankfurt, Paris, and Milan, with a total of 220 respondents participating.

These individuals, hailing from diverse backgrounds in ESG data analysis and leadership, shared their perspectives through live survey questions, offering a granular view of the ESG data landscape.

Key Priorities and Challenges

The Survey has laid bare the priorities and challenges facing ESG professionals today. A granular look at the survey data reveals a comprehensive picture of the landscape.

Navigating Priorities

• Regulatory Requirements: At the forefront for 35% of respondents, navigating the maze of regulatory requirements stands out as the highest priority. This reflects the increasingly complex and stringent regulatory environment surrounding ESG data.

• Climate Risk and Net Zero Solutions: Close behind, with 18% of participants focused on climate risk and net zero solutions. This underscores a significant commitment among firms to tackle global warming and strive for carbon neutrality.

• Deliver Alpha/Return: Garnering attention from 17% of respondents, the pursuit of alpha or superior investment returns through ESG integration shows the financial drive behind sustainable investing.

• Impact Investing: Chosen by 14% of those surveyed, impact investing emphasizes the desire to generate positive, measurable social and environmental impact alongside financial returns.

• ESG Scores: With 13% of participants highlighting ESG scores, the importance of quantifiable metrics to gauge ESG performance is evident.

• Biodiversity Estimates: Although a lesser focus, with 3% of responses, biodiversity estimates point to an emerging area of interest within the broader ESG agenda.

ESG Challenges

Each challenge, represented by a percentage of respondents, underscores the multifaceted nature of ESG data management and analysis:

• Data Coverage and Quality Issues with ESG Reported Data: This challenge is at the forefront, with a commanding 63% of respondents identifying it as their main concern. It underscores the significant gaps in company-reported ESG data, affecting the reliability and comprehensiveness needed for informed decision-making.

• Combining ESG with Alternative Data: Seen as a challenge by 13% of participants, this highlights the difficulties in integrating traditional ESG metrics with alternative data sources to enhance analysis and insights.

• Data for Biodiversity Exposure: Accounted for by 9% of respondents, this challenge reflects the growing importance of biodiversity as a component of ESG considerations and the difficulty in obtaining accurate and comprehensive data on it.

• Estimates for EU Taxonomy: With 7% of respondents pointing to this as a challenge, it emphasizes the complexities involved in aligning with the EU's classification system for environmentally sustainable economic activities.

• DNSH (Do No Significant Harm) PAI (Principal Adverse Impact) Data: Highlighted by 5% of the survey participants, this challenge pertains to the difficulties in gathering and analyzing data to ensure investments do not cause significant harm and adhere to sustainability criteria.

• Controversy Data: This is identified by 4% of respondents as a challenge, indicating the issues faced in monitoring and assessing company involvement in controversial activities that may impact their ESG performance.

Data Management Dilemmas

The survey also explored the biggest challenges firms face in managing ESG data.

Here’s a detailed breakdown of the responses:

• Constantly Evolving and New ESG Data Content: This challenge is the most significant, with 41% of respondents highlighting the difficulty in keeping up with the rapid pace of change and the constant influx of new data. This underscores the dynamic nature of the ESG landscape and the need for agile data management practices.

• Linking ESG Data Content to Existing Entity/Instrument Data: Faced by 25% of participants, this issue points to the technical and methodological difficulties in mapping ESG information to traditional financial data structures. This is crucial for holistic risk assessments and investment analysis.

• Reporting Requirements: Marked as a challenge by 18% of respondents, this highlights the burdensome nature of ESG reporting. The diverse and evolving requirements across jurisdictions and for different stakeholders make this an area of significant concern.

• Managing Multiple ESG Vendor Feeds: Acknowledged by 16% of those surveyed, this challenge emphasizes the complexity of integrating and reconciling data from diverse sources. It reflects the fragmented nature of ESG data provision and the operational hurdles in ensuring consistency and comparability.

As the ESG landscape continues to evolve, the insights from this survey serve as a crucial benchmark for understanding current priorities and challenges within ESG data management.

In this dynamic environment, firms must remain agile, adapting their ESG data strategies to meet the demands of a rapidly changing regulatory landscape and the increasing expectations of investors and stakeholders alike.

Ultimately, the journey towards integrating ESG considerations into all financial and investment analysis aspects is ongoing. The Bloomberg European ESG Data Trends Survey 2024 not only highlights the current state of play but also points towards the future direction of ESG data management.

As firms strive to harness the power of ESG data, their efforts will not only shape their sustainability journeys but also contribute to the broader goal of fostering a more sustainable and equitable global economy.

To access the Bloomberg European ESG Data Trends Survey 2024, click here.