ESG factors at the heart of investment claims new research

Bright Data (formerly Luminati Networks), an online data collection platform, has today released new research findings that underscore the importance of ESG considerations in investing.

The research, carried out by research provider Vanson Bourne, highlighted US survey respondents from within the finance, banking and insurance sectors who said that just over three-quarters (76%) of their organization’s investment decisions are impacted by ESG factors, whereas for UK respondents it’s 67%.

Traditionally, the finance sector has relied heavily on pure financial data sets, but research has shown the increase in awareness around ESG considerations.

The findings ranked the most pressing ESG considerations and found environmental practices (69%), organizational diversity (64%), and corporate governance (64%) as the most important considerations for 100 CDOs (Chief Data Scientists), CTOs, Heads of Data, CIOs and those who report to them. In addition to impacting investment decisions, ESG performance was also reviewed for business partnerships, with 95% of survey respondents in the US and UK saying that their respective organizations take the ESG performance of its suppliers/vendors into account.

Further key findings from the survey include:

  • 88% of survey respondents stated that they are part of organizations where measuring and reporting on ESG performance is either a key metric or of moderate importance to their business.
  • 66% of survey respondents who are at the most senior level of their organizations stated that ESG is a key metric in their organizations, compared to just 40% of departmental and intermediate management.
  • 80% of survey respondents who are at the most senior level of their organizations stated that ESG is incorporated into all business strategy decisions, compared to 30% of departmental and intermediate management.
  • Despite likely having fewer resources, 73% of survey respondents from organizations with 250-1000 employees stated they would definitely change business practices that were found harmful to society, even if it did not make commercial sense to do so. This compares to only 60% of respondents from organizations with more than 1000 employees who could say the same thing.
  • ESG is a key metric for 68% of organizations with 250-1000 employees, but it’s only a key metric for 52% of organizations with more than 1000 employees.

“Not only are companies basing their own investment decisions on ESG factors, but investment, private equity and venture capital firms are increasingly factoring in ESG performance metrics from the companies they choose to invest in,” said Douglas Laney, Innovation Fellow, West Monroe.

“This kind of information is mission-critical for those companies looking to make prudent long-term investment decisions,” said Or Lenchner, CEO of Bright Data.