ESG and climate data has moved from being an ‘optional add-on’ to a ‘core component’ of investment workflows, a new report by Morningstar Sustainalytics has found.
The group, which is part of Morningstar, Inc, said in its State of ESG Data Survey that ESG and climate data are increasingly being embedded into investment risk management systems and regulatory reporting. However, respondents also cited a number of challenges, related to data quality and coverage, increased demand for regulatory-aligned insights and a shift toward forward-looking climate and nature-related analytics.
Forward-looking insights
“Our first State of ESG Data Survey shows that standardised ESG disclosures remain critical,” commented David Pagliaro, president of Morningstar Sustainalytics.
“However, investors increasingly need forward‑looking insights – particularly on climate risks and nature impacts. Even with shifting political rhetoric in some markets, the underlying demand has not changed: investors want high‑quality, comparable data to understand risks, support meeting regulatory obligations, and to help create long‑term value.”
Some 47% of respondents cited gaps in ESG data coverage as being an obstacle to adoption, while 41% noted data quality issues, and 40% pointed to inconsistencies across vendors.
Elsewhere, close to three quarters (73%) of respondents cited International Sustainability Standards Board (ISSB) disclosures and 68% cited sustainable bond data as ‘must-have’ data sets, while 35% cited transition risk models as being ‘uniquely valuable’.
This points to a growing need for tools that support scenario analysis and long-term climate resilience planning, the data showed.
In addition, almost half of respondents ranked fund-level reporting capabilities among their top three priorities, underscoring the increasing complexity of regulatory disclosures and the demand for end-to-end data integration.
Private markets
Private markets were identified as one of the more challenging areas for ESG and climate data, with many investors expanding beyond listed markets into private assets where data availability remains limited.
Alongside private market data needs, respondents highlighted rising demand for regulation aligned datasets (58%), greenhouse gas emissions data (56%) and ESG risk ratings (49%).
‘With investors calling for deeper insights, stronger data foundations and more seamless integration, the State of ESG Data Survey 2025 underscores a market moving decisively toward maturity,’ Morningstar Sustainalytics added. Read more here.
