The ESG data landscape is becoming increasingly difficult to decipher. A survey conducted in collaboration between PIMFA and Alpha FMC, a top-tier asset and wealth management consultancy, has reported that even with the best of intentions, only 7 percent of respondents felt they are doing an outstanding job in informing their customers about this market.
This daunting data landscape is causing a ripple effect of obstacles for firms. They are straining to keep up with strict regulations, expanding customer demand, and a rapidly evolving digital world. In addition, they are being challenged to discern the quality of data sources, find new or unique ESG information, and find ways to disseminate this knowledge efficiently.
The onus is clearly on these firms to stay up to date on the ever-evolving ESG knowledge landscape. In addition to the research and analytics they are tasked with, they are increasingly being challenged to provide advice and investment guidance for their clients. From delving into the details of investment plans and creating tailored ESG strategies to incorporating accurate sustainability principles in their financial models. Collecting and interpreting the data in a meaningful way is central to their success.
To tackle these challenges, firms must look to fully understand how to take advantage of the available ESG data and analytics. Firms should explore ways to apply this data into their everyday decision-making and become experts in how to deliver sustainable and ethical investing portfolios for their customers.
In a world saturated with data, companies are continually striving to make sense of the numbers and discover how to use the data in the most effective way. Companies must work towards a long-term ESG strategy that is tailored to match their customers’ needs in order to stand out from their peers. They must become well-versed in the various data sources available, evaluate the sources for accuracy and reliability, and disseminate this knowledge to their customers.
As the complexity of the ESG landscape continues to expand, firms have to proactively invest in their skillset and resources to stay ahead of the competition and provide the best advice to their clients. This means keeping up with changes in regulations, strategies, and algorithms, as well as mastering the latest techniques and applications. Companies must apply this new knowledge to their portfolios, as well as consider ESG investing when offering advice to their customers for the ultimate customer experience.
Overall, the survey marks an area for improvement for firms. They must think carefully about how to address the challenges associated with navigating and embracing the ESG data market for both their own portfolios and the portfolios of their customers. It is clear that this market is becoming ever more sophisticated and it is only through taking the right steps and investing in the skills and resources to stay competitive that firms will reach excellence in their ESG offering and receive the best outcomes for their customers.