Top 10 ESG Data Providers
Who are the Top ESG data providers? And why do you need them?. ESG (Environmental, social and governance) data is critical to identify your risks and opportunities related to the environment, society, and corporate governance. In this article, we will first show some of the most important reasons why ESG data is essential for investors. Then we will focus on the main providers of ESG data, which is a key component to create sustainable portfolios.
The importance of ESG data
ESG companies outperform their peers over time. According to the Sustainalytics Global ESG Leaders Index, companies with strong environmental, social and governance practices performed better financially than the average company in the MSCI World Index. The benchmark index is composed of over 1,400 stocks from 23 developed market countries.
The role of ESG data in conducting market analysis
ESG data can be used more effectively by investors, including asset managers and institutional investors, to create sustainable portfolios, hedge risks, and improve their corporate governance practices. ESG data can also be used by companies themselves to report on their social and environmental performance.
The role of ESG data in conducting market analysis, supporting asset allocation and risk management, and in providing insights into the long-term sustainability of investments is growing.”
5 key trends in ESG analysis, which will have an increasing impact on how companies are valued:
- ESG data is now mainstream and is likely to become even more important in the future.
- ESG data is becoming increasingly available to investors, both directly and indirectly.
- Investors are using ESG data to analyse corporate governance and performance, and as a proxy for financial data.
- ESG incentives are increasingly being used to align the interests of asset owners with those of asset managers.
- Asset owners are using ESG information to engage with companies.
ESG data sources
ESG data can come in many forms, notably 'inside -out' versus 'outside-in'. Inside out data refers to data reported by corporations - and typically used by analysts to make judgements, ratings and scores.
Examples of inside out ESG data include:
- Data on companies’ environmental management systems (EMS) and environmental performance;
- Data on a company’s governance or financial performance;
- Information on labor relations, including the quality of working conditions and labor practices;
- Data on corporate leadership, including information on executive compensation.
Examples of outside-in ESG data include:
- Physically sourced data from external sources, such as smart meters, sensors, etc.
- Data from external sources that are not physically sourced, such as weather forecasts, traffic reports, etc.
- Data derived from company review sites
- Social media such as Linkedin, Twitter, Facebook
- News, Media and Press Releases analysed through Natural Language Processing
Outside-in data is typically updated more frequently, in some cases real-time, whereas inside-out or analyst based data can lag by 6-12 months due to the additional research, and reliance on company reporting which is usually once a year for ESG related disclosure.
Read on to see the top providers of this data.
Top 10 ESG data providers
This list of the Top 10 ESG providers are rated on cost, frequency, type (outside-in vs inside-out), coverage and whether they have a free trial or not.
| Provider |
Cost |
Coverage |
Type |
Free Trial |
Frequency |
| ESG Analytics |
$ |
20,000+ companies
Customers can request on demand |
Outside-In (AI based)
Inside Out (analyst based) |
Yes |
Real-time |
| MSCI |
$$$$ |
2,500 companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
| Refinitiv |
$$$$ |
10,000 companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
| Sustainalytics |
$$$$ |
4,500 companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
| RepRisk |
$$$ |
10,000+ companies |
Outside-In (AI based) |
No |
Daily |
| S&P Global |
$$$$ |
8,000 companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
| Bloomberg |
$$$$ |
11,000+ companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
| FTSE Russel |
$$$$ |
7,000 companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
| ISS Global |
$$$$ |
9,000 companies |
Inside Out (analyst based) |
No |
Aprox every quarter |
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Why is ESG data expensive?
The costs of collecting, analyzing and storing data are not cheap. And unlike financial data, there is no standardized process for determining ESG scores.The complexity of ESG data and the lack of standardization in the process for assessing environmental, social and governance factors also makes it difficult to compare companies on these metrics. Regulators are trying to make ESG information more transparent by mandating that companies disclose them alongside their financials, but this is still materializing globally. Traditional providers such as MSCI or Refinitiv employ armies of analysts to get this data from corporate disclosures (if it exists) and then normalize that data and provide it back to you. This is a very expenive process, with lots of quality control, and importantly - because this data is not disclosed very frequently (companies typically disclose ESG related data annually), there is less incentive to have a continuous subscription to a ESG data feed, along with risk of information leakage. All of this results in very expensive, and limited annual contracts.
Artificial Intelligence is changing the way we create and consume ESG data, which address many of the issues above - but that is a topic for another day.
Why is ESG data expensive? 6
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