VENDOR VIEW: DATA
Data is the bane and boon of addressing sustainable investment gap
Wielding this tool the right way is key to pushing and meeting ESG goals, says Experian’s Sisca Margaretta.
The lack of standardised, defined benchmarks means much of the ESG data companies are providing right now is not useful enough to support investment decisions
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hilst data holds the power to make more informed ESG-related decisions, there is a gap between what companies need versus what data they currently have. “A few years ago, we didn’t have enough data available to support ESG investing. Whilst there is much more data now, it’s fragmented across different sources, including company reports, news articles, data vendors, and rating agencies,” Sisca Margaretta, Chief Marketing Officer, EMEA & APAC at Experian, explained to Asian Banking & Finance in an interview. In a separate study, professional services firm EY also found that 46% of asset managers and 25% of banks find the lack of real-time data on ESG to be limiting. The lack of standardised, defined benchmarks means much of the ESG data companies are providing
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We have ample information to drive fund allocation towards sustainable causes if we interpret it efficiently
right now is not useful enough to support investment decisions, the Experian expert added. “Beyond problems like inadequate disclosure and data availability, a lot of companies today also adopt practices like ‘greenwashing’ – which refers to using marketing tactics to over-amplify their ESG efforts – to gain favour from stakeholders,” Margaretta warned. In a survey of 6,000 bank customers globally, cloud platform provider Mambu found that over 67% of respondents believe that their banks are guilty of greenwashing: that is, they believe that their banks are overstating their sustainablerelated efforts. In financial hub Singapore, that’s 68% of respondents. This is where a system of checks and balances becomes essential to make sure that any and all ESG data is accurate, honest, and reliable, according to Margaretta.
Sharing the right information is also key to ensuring that consumers are aware of banks’ ESG. Raising investments Beyond beating away reputational risks and meeting the increasing sustainability mandates of both regulatory bodies and the public, the right use of data can also encourage and push up investment activities in the ESG space. “When reliable and adequate data is made available, investments tend to rise. Given that over 90% of the world’s data has been created in the last five years, we have ample information to drive fund allocation towards sustainable causes – provided we choose and interpret it efficiently,” Margaretta said. Margaretta noted the growing awareness around ESG investing over the last few years, which in turn made it a central concern for
