Investors, finance experts crave better sustainability data: ISF survey results

The ISF surveyed contacts in finance, academia, NGOs and the public sector to better understand the amount and quality of sustainability data that’s out there. The survey makes clear that the data is not currently meeting the demands of the market, with significant implications for investment decisions and holding firms accountable for greenhouse gas emission reductions.

• The survey provides clear evidence that more data and higher quality data is in demand by market participants, government officials and sustainable finance experts.
• Frustrations with the state of sustainability data appear to be prevalent across all sectors surveyed.
• Only 6% of respondents were “very satisfied” with the “availability of sustainability data.”
• Missing, incomplete, and errors in data top the list of issues with the available data.
• A whopping 41% selected “Need Additional Data” as a top priority when ranking their key sustainability data needs.

Financial institutions are in a unique position to mobilize climate-related investments, and indeed the financial sector as a whole will play a vital role in the transition to carbon-neutrality. However, in order to be efficient allocators of capital, these institutions need data to make allocation decisions. Regulators are faced with a similar problem in that their ability to monitor financial risks associated with a changing climate is impaired by the lack of data. Furthermore, investors seeking to make retirement investment decisions are unable to evaluate the financial impact a changing climate could have on their portfolio. 

In this context, the ISF conducted a survey on the state of sustainability data such as the amount of greenhouse gas emissions produced by companies’ operations. The resulting report by ISF Research Director Ryan Riordan and Research Associate Will Hamilton, “The State of Corporate Sustainability Data in Canada — Survey Results”, provides a clearer picture of the issues with data available today, as well as the needs of researchers and professionals going forward.

The survey was distributed to over 700 individuals and 120 responses were received. The analysis is based on 84 complete responses. Key findings:

• Only 6% of respondents were very satisfied while 45% of respondents reported being “somewhat satisfied”. Of the dissatisfied respondents, 44% of reported being “not very satisfied” with the current availability of sustainability data and 5% were listed as “totally dissatisfied”. On balance it is fair to say that sustainability data can be improved.
• Frustrations with the state of sustainability data appear to be prevalent amongst researchers working across all sectors. There is significance to this consensus, as cooperation between all stakeholders is extremely important if these data gaps are to be closed. Having a common view of the quality of the data is important to having the data improved.
• While missing, incomplete, and errors in data top the list of issues with the available data, difficulties accessing and using the data were also listed by a significant number of respondents as their top issue. Clearly, there are multiple areas in which sustainability data can be improved.
• A whopping 41% selected “Need Additional Data” as a top priority when ranking their key sustainability data needs. Overall, responses on researchers’ needs should be taken as clear evidence that more data and higher quality data is in demand. Both private and public data providers should take note.
• The data sources most commonly used by participants were Bloomberg, followed by Morgan Stanley Capital International (MSCI), and CDP (formerly the Carbon Disclosure Project).

Comments from respondents

An issue with comparing data was highlighted by one respondent’s comments that the “fundamental challenge is having standard, agreed-to and understood definitions. For example, a consistent approach to GHG measurement or how cross-border and equivalency issues are handled.”

Others expressed their frustrations with the lack of transparency. One respondent commented that firm-reported sustainability data is often “…inconsistent, lagging or even often missing”.

They noted that important numerical data such as emissions are commonly omitted. Another commented that “Methodologies changing regularly means few long-term data sources.” Researchers using data to answer specific questions are often forced to use proxies or imperfect workarounds, reducing the potential value of analysis.

Researchers are having difficulty assessing whether firms are actually reducing emissions for these reasons.

“Pressure on these firms will be greatly increased with proper data standards in place,” said Dr. Riordan. “Consistent and sound data collection must be developed, standards established, and key statistics or indicators identified in order to properly assess the progress of firms.”

About the Institute for Sustainable Finance

ISF was launched in 2019 as a Canadian-specific centre of expertise and collaboration for advancing sustainable finance. Housed at Smith School of Business at Queen’s University, ISF is independent and non-partisan. It focuses on developing research, education, and collaborations among academia, business and government that will improve Canada’s capacity for sustainable finance as the shift to a low-carbon economy occurs. ISF’s work is generously supported by The Ivey Foundation (inaugural supporter), the McConnell Foundation, the McCall MacBain Foundation, the Chisholm Thomson Family Foundation, Smith School of Business, Queen’s University and Founding Contributors BMO, CIBC, RBC, Scotiabank and TD Bank Group.

Media contact

David Watson
Associate Director, Communications, Institute for Sustainable Finance
david.watson@queensu.ca
C: 613.796.3605