The Latest Esg Data Industry Statistics Explained
Globally, ESG data usage in the investment industry is projected to grow at a CAGR of 20.2% in the next 5 years.
The statistic indicates that the use of Environmental, Social, and Governance (ESG) data within the investment industry is projected to increase significantly over the next five years, with a Compound Annual Growth Rate (CAGR) of 20.2%. This growth signifies a rising trend among investors to incorporate ESG factors into their decision-making processes, reflecting a growing emphasis on sustainability, ethical considerations, and social impact in investment strategies. The rapid increase in the utilization of ESG data suggests a shift towards more responsible investing practices and a recognition of the importance of not only financial returns but also environmental and social outcomes in investment decision-making.
North America held the highest market share of 32.9% in the ESG data market in 2020.
The statistic “North America held the highest market share of 32.9% in the ESG data market in 2020” indicates that among all regions, North America had the largest portion of the market dedicated to environmental, social, and governance (ESG) data in 2020. This means that companies in North America were more actively involved in collecting, reporting, and utilizing ESG data compared to other regions worldwide. The high market share percentage suggests that North American firms are likely paying more attention to ESG issues and their integration into decision-making processes, reflecting a growing importance placed on sustainability and responsible business practices in the region.
Only 29% of investors believe that current mandatory ESG disclosures to be adequate.
The statistic indicates that a majority of investors, specifically 71%, do not believe that the current mandatory disclosures related to environmental, social, and governance (ESG) factors are sufficient. This likely suggests a widespread perception among investors that the information provided by companies in terms of their ESG practices is inadequate for making well-informed investment decisions. With the increasing importance of sustainable and responsible investing, the finding highlights a significant gap between what investors want to know about a company’s ESG footprint and what is actually being disclosed. This lack of confidence in existing ESG disclosures may impact investor confidence and decision-making when evaluating companies’ sustainability performance and overall long-term prospects.
There are more than 600 ESG ratings and rankings globally.
The statistic indicates that there are more than 600 Environmental, Social, and Governance (ESG) ratings and rankings systems available worldwide. ESG ratings and rankings are used by investors, stakeholders, and companies to assess the sustainability and ethical practices of businesses. The significant number of ESG ratings and rankings highlights the growing importance of sustainability and responsible investing in today’s business landscape. The variety of systems also reflects the diverse methodologies and criteria used to evaluate ESG performance, providing stakeholders with a range of perspectives to consider when making investment or business decisions.
By 2030, it’s expected that the ESG market will grow to $414 billion, according to Statista.
The statistic indicates that the environmental, social, and governance (ESG) market is projected to experience significant growth, reaching a value of $414 billion by the year 2030 according to the reputable source, Statista. This forecast suggests a growing emphasis on sustainable investing practices by businesses and investors worldwide. The increasing awareness of environmental and social responsibilities, along with the recognition of governance principles, is driving this upward trend in the ESG market. These developments signify a shift towards more conscious and responsible investing strategies aimed at promoting positive impacts on the environment, society, and corporate governance practices in the global financial landscape over the coming decade.
Data suggests that 85% of individual investors in the US have expressed interest in sustainable investing.
The statistic that 85% of individual investors in the US have expressed interest in sustainable investing indicates a high level of awareness and consideration of environmental, social, and governance (ESG) factors among retail investors. This suggests a growing trend towards socially responsible investing practices, where investors are not only seeking financial returns but also looking to align their investment decisions with their values and beliefs. The significant percentage of individual investors expressing interest in sustainable investing indicates a potential shift in the investment landscape towards more responsible and ethical practices, reflecting a broader focus on sustainability and social impact within the financial industry.
According to PwC, almost 60% of investors want issuers to explicitly link ESG factors to business strategy.
This statistic from PwC reveals that a substantial majority of investors, around 60%, are seeking companies to clearly and directly connect environmental, social, and governance (ESG) factors with their overall business strategy. This suggests that investors are increasingly interested in understanding how ESG considerations are integrated into a company’s operations and decision-making processes. By demonstrating a strong alignment between ESG factors and business strategy, companies can potentially enhance their transparency, credibility, and long-term sustainability in the eyes of investors who are placing greater importance on ESG practices and their impact on financial performance and risk management.
27.9% of all US-based AUM were found to be employing sustainable investing strategies in 2020.
The statistic ‘27.9% of all US-based AUM were found to be employing sustainable investing strategies in 2020’ indicates that just over a quarter of the assets under management (AUM) in the United States incorporated sustainable investment practices in the given year. This suggests a growing trend towards incorporating environmental, social, and governance (ESG) factors into investment decisions, reflecting the increasing emphasis on sustainability and social responsibility in financial markets. The data highlights that a significant portion of investors are recognizing the importance of aligning investment activities with their values and environmental concerns, leading to a notable shift towards more sustainable investment strategies within the US financial industry.
Globally, sustainable assets increased 15% in 2020 to reach $35.3 trillion, representing 36% of all professionally managed assets.
The statistic indicates a significant growth in sustainable assets on a global scale in 2020, with a 15% increase from the previous year, reaching a total of $35.3 trillion. This represents a substantial proportion of all professionally managed assets, accounting for 36% of the total. The increase in sustainable assets reflects a growing trend towards environmentally and socially responsible investing practices worldwide. Investors are increasingly seeking opportunities that align with their values and beliefs, driving the expansion of sustainable investment options and promoting a more sustainable and ethical approach to financial management.
Research shows that 75% of institutional investors won’t invest in a company if it’s not managing ESG risks.
This statistic indicates that a significant majority of institutional investors prioritize environmental, social, and governance (ESG) factors in their investment decision-making process. Specifically, 75% of institutional investors are unlikely to invest in a company that is not effectively managing ESG risks. ESG factors have gained prominence in the investment community as they are seen as indicators of a company’s long-term sustainability and resilience. Institutional investors consider ESG risks such as climate change impacts, workforce diversity, ethical business practices, and corporate governance when evaluating investment opportunities, suggesting a shift towards more socially responsible and sustainable investing practices in the financial industry.
79% of asset managers said they always or often integrate ESG data into their investment process.
The statistic indicates that a high proportion, specifically 79%, of asset managers consistently incorporate environmental, social, and governance (ESG) data into their investment decision-making. This suggests a growing trend towards considering sustainability and ethical factors in the investment process. By integrating ESG criteria, asset managers are likely aiming to not only achieve financial returns but also align their investments with broader societal and environmental goals. This statistic highlights a shift towards more responsible and sustainable investing practices within the asset management industry.
The Global ESG Data Market size was estimated at over US$ 500 million in 2020.
The statistic ‘The Global ESG Data Market size was estimated at over US$ 500 million in 2020’ refers to the total value of the Environmental, Social, and Governance (ESG) data market worldwide in the year 2020. ESG data relates to information on a company’s performance in areas such as sustainability, social responsibility, and corporate governance. The estimated value of over US$ 500 million signifies the economic importance and growing demand for ESG data by investors, companies, and other stakeholders looking to evaluate and make decisions based on a company’s ESG practices. The increasing focus on sustainable investing and corporate responsibility has played a significant role in driving the growth of the ESG data market.
The financial sector had the highest sector allocation of ESG data-focused funds at 31% in 2020.
The statistic indicates that in 2020, ESG (Environmental, Social, and Governance) data-focused funds allocated the highest percentage of their investments to the financial sector, at 31%. This suggests that fund managers prioritized investing in companies within the financial sector that demonstrated strong performance in environmental sustainability, social responsibility, and governance practices. The high sector allocation to the financial industry could be due to various reasons, such as the sector’s increasing focus on ESG issues, the potential for growth and innovation in ESG-related financial products and services, and the alignment of ESG principles with the core values of the financial sector. Overall, this statistic highlights the growing importance of ESG factors in investment decision-making and the significant role of the financial sector in driving sustainable investment practices.
Only 10% of companies globally report sufficient data on key ESG indicators.
The statistic “Only 10% of companies globally report sufficient data on key ESG indicators” suggests that a vast majority of companies worldwide are not adequately disclosing information related to environmental, social, and governance (ESG) criteria. ESG indicators are important metrics used to evaluate a company’s sustainability practices and societal impact, making transparency in reporting crucial for stakeholders to assess a company’s overall performance beyond financial metrics. The low reporting rate indicates a lack of comprehensive data, potentially hindering investors, regulators, and other stakeholders from making informed decisions and holding companies accountable for their ESG responsibilities. Improving data disclosure and transparency in ESG reporting is essential for promoting sustainability and better corporate governance practices across industries on a global scale.
ESG data was used (to some extent) by 98% of asset managers in 2020.
The statistic indicates that a significant majority of asset managers, specifically 98% of them, incorporated environmental, social, and governance (ESG) data to varying degrees in their decision-making processes in 2020. ESG data is used to evaluate and assess the sustainability and ethical impact of investments, which can provide valuable insights into the long-term viability and risk profile of an asset. The high percentage suggests a growing recognition among asset managers of the importance of considering ESG factors in their investment strategies to not only drive positive environmental and social outcomes but also to potentially enhance financial performance and mitigate risks in their portfolios. This trend underscores the increasing integration of sustainable investing principles into mainstream financial practices.
80% of millennials are interested in sustainable investing.
The statistic that 80% of millennials are interested in sustainable investing indicates a strong trend among this demographic towards incorporating environmental, social, and governance (ESG) factors into their investment decisions. This high level of interest suggests that millennials prioritize sustainability and ethical considerations when it comes to investing their money. Sustainable investing involves selecting investments that align with personal values and goals, such as supporting companies with positive social and environmental impact, while also seeking financial returns. This statistic highlights the potential impact that millennials can have on shaping the future direction of the investment industry towards more sustainable practices.
24% of financial services professionals believe a lack of ESG data hinders their organization’s ability to invest responsibly.
The statistic states that 24% of financial services professionals perceive a deficiency in environmental, social, and governance (ESG) data as a hindrance to their organization’s capacity to make responsible investment decisions. This suggests that a substantial minority within the financial industry believes that insufficient access to ESG data impairs their ability to evaluate potential investments through the lens of sustainability and ethical considerations. ESG factors are increasingly considered important for assessing investment risks and opportunities, as they provide crucial insights into a company’s long-term performance and impact on society and the environment. Therefore, the perceived lack of ESG data by these professionals may be seen as a significant challenge in achieving their organization’s goals of responsible investing.
References
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