Challenges in ESG data collection
Collecting ESG data is far from a straightforward process. Both investors and managers often encounter a range of difficulties, including:
- Defining the right scope and identifying relevant data points – One of the first challenges in ESG data collection is determining which specific metrics are most relevant to an organisation’s operations, stakeholders, and long-term sustainability goals. Without clear guidelines, data collection efforts may become fragmented and inconsistent.
- Improving completeness and accuracy of data – Achieving a truly comprehensive ESG dataset is an ongoing challenge, as sustainability metrics are often complex, evolving, and influenced by external variables. While perfect completeness may be unrealistic, organisations must strive to work with the best available data and continuously refine their collection processes, year by year.
- Establishing clear ownership of ESG data – In many organisations, ESG-related information is scattered across multiple departments and business units. The absence of a centralised data ownership structure can make it difficult to ensure consistency, accuracy, and accountability in reporting.
- Gaining access to reliable and verifiable data – ESG data often comes from a variety of internal and external sources, some of which may lack transparency or credibility. In real estate for example, its common that certain ESG data may be held and owned by the tenants and that an owner needs to rely on collaborative information exchange in order to collect such ESG data. Ensuring that data is both accessible and trustworthy is a key challenge for businesses seeking to make informed sustainability decisions.
