Generation Investment Management, the sustainable investment firm, has called for a revolution in environmental, social, and governance (ESG) data.
According to a new report from the firm, there are current limitations with available data. However, there are innovations that will transform ESG data, but there are still areas that need more attention.
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While progress has been made in recent years regarding ESG data, particularly when it comes to climate change, it is overall still patchy. Moreover, data related to social issues is still poor.
Another issue is that data is often retrospective rather than forward looking.
Felix Preston, director at Generation Investment Management and the report’s author, said: “Companies today face tough environmental limits and societal expectations that threaten their license to operate. As long-term investors, we want to know that companies have a clear strategic direction, and we need better data on how they set and work to achieve their targets. We need data on how well companies are doing compared to their public statements. Investors need sustainability targets to be as clear as targets for financial management. To achieve that, we need a revolution in data.”
He continued: “We won’t solve this issue overnight – it will take active collaboration with multiple stakeholders, including data providers, investors, policy makers and non-governmental organizations. We look forward to partnering with others to build the next generation of analytical tools that will appropriately underpin the fast-evolving landscape of sustainable investment.”
Generation Investment Management currently holds around $23bn of assets under management.
