Climate-related data – the investors’ perspective – Insights from Eurosif
In a recently published study called “Eurosif Report on Climate-related Data – The Investors’ Perspective“, Eurosif, a leading pan-European association promoting sustainable finance, provides insights into the challenges of the availability, reliability and comparability of climate-related data that investors can utilise for investment decisions.
This blog post is part one of a two-part series. Investors are important users of corporate sustainability reports. So in this first part, we look at the challenges from an investor’s viewpoint – we discuss the study’s key findings and focus on data sources, availability, quality and the implications for investors. In part two, we ask how companies can improve their sustainability reporting to better meet the needs of investors and other stakeholders. That will also include an overview of the European regulatory landscape and how regulatory initiatives drive the amount and quality of sustainability and climate-related data that has to be disclosed by companies. Furthermore, we discuss how regulation on external data providers can help to create a level playing field regarding climate-related data used in the investment process.
Eurosif is a top European association that advocates for Sustainable Finance throughout the EU, the wider European Economic Area (EEA), and the United Kingdom (UK). It consists of national Sustainable Investment Fora (SIFs) based in Europe, and these SIFs have a diverse membership that includes asset managers, institutional investors, index providers, and ESG research & analytics providers. Eurosifs’ activities include contributing to public policy and researching sustainable investments. More information about Eurosif and its mission can be found on their homepage .
Sustainable Finance amidst a climate crisis – how investments and regulatory initiatives create positive climate-related impacts
Sustainable Finance is about creating positive climate-related impacts and, by doing so, enabling long-term value creation. The two main drivers are stakeholders with an appetite for green financial products, which is still rising. Conversely, regulatory initiatives like the “European Green Deal”  aim to redirect capital flows towards greener economic activities. The “European Green Deal” is flanked by other regulatory initiatives on the European level: the “Corporate Sustainability Reporting Directive” (CSRD)  and with it, the “European Sustainability Reporting Standard” (ESRS) , the “Sustainable Finance Disclosure Regulation” (SFDR) , the EU-Taxonomy  and to a broader extend the “EU Green Claims Directive”  or the “Corporate Sustainability Due Diligence Directive” (CSDDD) .
All these initiatives are a clear step up in regulation and the information that has to be disclosed. One example is the CSRD compared to its predecessor, the “Non-Financial Reporting Directive” (NFRD) . In short: today’s regulatory initiatives are data-driven and go way beyond purely qualitative disclosure of sustainability information compared to the NFRD.
All this has implications for Sustainable Finance – whether driven by regulatory initiatives or stakeholder demands, reliable data is vital: “To achieve these objectives, they [investors and owners] need widely available, high quality and decision-useful climate-related information from investee companies. Their corresponding data and information needs have significantly increased in recent years but cannot be fully satisfied yet from a data supply point of view.” 
Climate-related data and the investors’ perspective – key takeaways from the Eurosif report
Asset managers and owners are increasingly considering climate-related factors in their decision-making process. The aim is to reduce financial risks and, at the same time, improve climate-related impacts. Eurosifs’ study provides valuable insights into the challenges related to reliable and available climate-related data that is the foundation for this decision-making process.
According to Eurosif, the study had two main objectives: “The study adopts both a risk and an impact perspective: which climate-related information is considered most relevant for decision-making? What are asset managers’ and asset owners’ main challenges, expectations and perceived trends regarding climate-related data and information?” and “This study’s second objective is to derive from the findings concrete recommendations for action for EU policymakers and market practitioners.”  Thirty-three respondents from asset management companies, banks, insurance and reinsurance companies, pension funds, foundations and private equity/venture capital firms from the EU, Switzerland, the United Kingdom, Asia, the United States, Canada, Norway and other countries participated in the study.
Data sources for the investment process
Where does the data used in the investment decision-making process come from? Besides publicly available data, the two most important sources are external data providers and information disclosed in sustainability reports.
According to the findings of the study, “Data reported by investee companies through sustainability, financial or integrated reporting”, “Data and tools provided by multiple external data, analysis & research providers”, and “Data publicly available” are the top three sources for climate-related data all ranking with 67%.