Institutional Investors Push for Better ESG Data Integration as Market Matures

Event summary

  • Morningstar Sustainalytics surveyed 145 institutional investors, revealing rising demand for ESG data integration amid market maturity.
  • 47% of respondents cited gaps in ESG data coverage, while 41% reported data quality issues and 40% noted inconsistencies across vendors.
  • Forward-looking climate metrics, particularly transition risk models (35%), are gaining prominence alongside regulatory-aligned datasets.
  • Private markets remain a challenge for ESG data availability as investors expand into alternative asset classes.

The big picture

Morningstar Sustainalytics' survey highlights a financial industry increasingly reliant on high-quality, forward-looking ESG data. As regulatory frameworks like ISSB disclosures gain traction and investors demand deeper integration of climate risk models, the market is moving toward maturity. The challenge lies in bridging gaps in data coverage and quality, particularly in private markets where sustainability insights remain limited.

What we're watching

Data Quality Dynamics
How Morningstar Sustainalytics will address the 47% coverage gap and 41% quality issues to meet institutional investor demands.
Regulatory Alignment
Whether ISSB-aligned datasets can become the industry standard as investors increasingly prioritize regulatory compliance.
Private Markets Expansion
The pace at which ESG data availability improves in private markets to support whole-portfolio sustainability strategies.

Related topics

Climate Risk