Bloomberg Survey Highlights ESG Data Management as Key Hurdle for European Firms Amid Regulatory Shifts

In an survey conducted by Bloomberg, around 200 financial market participants across Europe have voiced their concerns over managing the burgeoning volume of ESG data. This survey, spanning cities like London, Stockholm, Geneva, and Milan throughout 2023, delves into the complexities of ESG data prioritization, the challenges it presents, and the strategies currently being employed by firms to navigate this landscape.

With the Corporate Sustainability Reporting Directive (CSRD) on the horizon, regulatory compliance emerges as the primary motivation for accessing ESG data, as indicated by 35% of respondents. This upcoming directive is poised to expand the volume and enhance the quality of company-reported ESG data. Yet, the anticipation of this surge also brings to light concerns over data quality and coverage, with a notable 63% of participants marking it as their principal worry.

The survey underscores the dynamic nature of ESG data as its most significant challenge, with 41% of respondents struggling to keep up with its constant evolution. Moreover, integrating this ever-growing data set with existing frameworks presents a considerable hurdle, alongside meeting reporting requirements and managing inputs from various ESG vendors. The process of assimilating new data sets is highlighted as particularly resource-intensive, suggesting a pressing need for more streamlined approaches.

In grappling with these challenges, firms are adopting a variety of data management strategies. A significant portion (38%) opts for centralized management through proprietary solutions, while 32% rely on individual business units to handle their ESG data. Outsourcing to third-party vendors is the chosen path for 10% of firms, reflecting a landscape of varied approaches toward achieving efficient ESG data management.

Nadia Humphreys, Bloomberg’s Head of Sustainable Finance Data Solutions, emphasizes the acute focus on data management for European firms against the backdrop of global challenges in data quality and comparability. Bloomberg’s initiatives, such as providing sustainability data in a structured format and the introduction of Data License Plus (DL+) ESG Manager, aim to simplify the ESG data workflows. These solutions are designed to leverage Bloomberg’s vast datasets and those from partner vendors, facilitating effortless data management and maximizing value extraction from ESG information.