Sustainability Community

Hello Community.

I see some discussions on social media and in meetings about ESG Scores and ratings versus ESG Raw Data. Back in June this year we also had a member online networking meetup with the Head of Thematics Investments from BlackRock discussing similar issues.

Sharing with you the latest FTSE Russell Global Asset Owners Survey here.

It shows an even split between preference for aggregated ESG scores and raw ESG data, though this varies by region. In EMEA, 56% prefer raw data, while in APAC, 54% opt for aggregated scores. In the Americas, preferences are more balanced. Europe's preference for raw data reflects its advanced ESG integration, while APAC's reliance on scores indicates it's still developing.  In Canada, raw data is gaining traction, while in the US, preferences differ by state.

AI tools like Neural Alpha's Responsible Capital are also changing the landscape, making raw data processing more accessible and cost-effective.

What do you think will become more prevalent in the future? What do you prefer to use?

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Aya Pariy
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Attachment(s)

FTSE Asset Owner Report 2024.pdf   1.09 MB 1 version

To draw a parallel from aggregate ESG score to ESG ratings issued by third-parties. My experience is that you can rarely rely on third-party scores, which probably is a combination of the coverage analyst not understanding underlying drivers and he/she covering 100s/1000s companies at the same time. The process is therefore more data processing, rather than analysis. Overall, I would go for raw data (assuming time allows) and ratings if no resources are available.