The Future of ESG Data EMEA 2025 conference round-up

Now in its sixth year, the conference expanded to include a stream on nature data and thematic round table discussions. Peter Cripps reports

The ESG backlash shows no signs of abating, but sustainability data remains a valuable part of investment decision making, a conference heard.

ESG data is much sought-after by investors for numerous reasons, Environmental Finance’s The Future of ESG Data EMEA conference heard, although there remains room for improvement and the development of new data.

Daniel Kricheff, senior director at the sustainability strategies group at MetLife Investment, said there are four main ways in which the firm uses ESG data: risk management, customisation for different clients, regulatory purposes, and reporting.

“[ESG data is] a starting point for analysis [pointing us to] where we need to pay more attention – it can guide our research but it’s never a replacement for fundamental analysis,” he said. “It’s part of our toolkit.”

Yun Wai-Song, head of sustainable investment at SCOR, said “risk is very important” for the reinsurer, and ESG data can help enhance its understanding of this.

“ESG data is important to inform our engagement with investors,” he added.

Bowie Ko, senior researcher for responsible investment at Man Group, uses ESG data to identify “systematic signals” that can help find alpha.

“There’s scope for ESG data to be useful in alpha generation – it’s an area we can grow in as an industry,” she argued.

She provided two examples of how it uses this “quant approach”:

• To identify decarbonisation transition leaders, by looking at data such as patents and green capex.
• To help predict the impacts of extreme weather events, by looking at geospatial data to help understand which companies may be impacted by climate events.

While data is improving across the board, many well-known pain points remain. For example, Scope 3 emissions data is still problematic.

Emily Homer, director of climate and biodiversity specialist at Robeco, said the asset manager only uses estimated Scope 3 data, as the quality of reported data is not good enough and penalises companies, such as fellow panellist Unilever which does a good job of reporting. Using estimated data therefore levels the playing field, she argued.

This year’s conference comes at an interesting point in time, with the EU reconsidering its sustainability-related regulations in a bid to reduce the reporting burden on companies. This brings into sharp focus the question of ‘which ESG data is financially material?’, which was a recurring theme throughout the day.

For corporates tasked with reporting the data, however, ESG data remains a challenging landscape to navigate.

Matthew Kay, director of ESG Finance at IHG Hotels & Resorts, for example, said it had finished its double materiality assessment under the EU Corporate Sustainability Reporting Directive (CSRD), only for a review of the regulation to be launched shortly afterwards.

Jenn Hui-Tan, chief sustainability officer at Fidelity International, said the intervention of policymakers had left the ESG data landscape with the “worst-of-all-worlds”, because they had removed the voluntary, best-efforts nature of reporting, but had yet to replace it with a fully-fledged compliance framework.

“The biggest challenge is regulatory uncertainty – many of us have diverted an enormous amount of resource this year to preparing for the CSRD,” he told the conference. “It was a very significant undertaking.

“It’s frustrating we have invested all this time and energy, and we are sitting here unsure where the regulation will take us.

“If we rewind the clock to a few years ago, ESG disclosure was voluntary - but at least it represented good-faith efforts by companies to tell investors what they thought we should know about their business.

“So, in a way, I feel we are seeing a worst-of-all-worlds situation, where we don’t have the certainty of regulations driving consistent disclosure across industry, also we no longer have that good-faith voluntary effort.”

He hopes the adoption of the International Sustainability Standards Board (ISSB) standards and the CSRD over the next two or three years will improve the situation.

The developing regulatory regime was also creating challenges for data providers. Julia Haake, head of ESG rating agency at EthiFinance, said the reducing regulatory agenda around ESG reporting means that “the party is over”, and had created a slowdown in the industry.

She said it would be harder for smaller rating agencies to meet the requirements of the incoming EU ESG ratings oversight regime. But, on the flip side, the reduction in scope of the CSRD would reduce the amount of reported ESG data available, meaning investors would likely need to buy ESG data instead.

At the same time that the ESG data industry is going through a slowdown, it is expanding into a new area, with a drive to understand data related to natural capital. To reflect this, the conference for the first time featured a stream dedicated to the topic.

While the Taskforce on Nature-related Financial Disclosures (TNFD) recently celebrated a two-year anniversary of its reporting framework, corporates and investors are still at the early stages of getting to grips with nature-related risks and opportunities.

Ashley Gorst, senior investment stewardship manager at Norges Bank Investment Management (NBIM), argued that many nature data-specific financial materiality assessments are currently underdeveloped.

Describing many of the financial materiality assessments as "quite rudimentary", he said the market must move beyond "reporting for reporting's sake" and be more proactive in the way it collects and uses data.

The conference concluded with another new feature – a series of round-table discussions expanding on various themes featured in sessions earlier in the day. These conversations were well-attended and lively, illustrating the importance of the rapidly evolving ESG data market to the financial and corporate world. The discussions continued over drinks.

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