Top 5 ESG Data Providers and What to Look For

Environmental, social, governance (ESG) investing strategies are increasing in popularity as investors become more aware of the ways sustainability may impact company performance, as well as how company efforts may help mitigate potential environmental risks. The demand for companies to provide transparent reporting data about their practices is growing.

In order for retail and institutional investors to evaluate companies based on ESG metrics and ratings, they need accurate data. Today, there is a range of global providers that collect, analyze, and distribute information about companies’ ESG performance and risk mitigation efforts. Their role helps provide investors with the insights and tools to make decisions about the ESG companies they invest in.

That said, ESG standards are very much in flux, and many companies use voluntary frameworks, which can make an investor’s job more difficult.

The Growing Market for ESG Data

With the rise of ESG investing, the global market for ESG data is growing rapidly, with over 100 ESG data providers worldwide. These firms range from large global entities such as MSCI and Sustainalytics to smaller niche players specializing in specific regions or industries.

Some companies are also expanding their focus to include ESG alongside traditional financial analysis, and a few tech startups are trying to disrupt the market with artificial intelligence (AI)-driven insights.

How ESG Data Is Collected

ESG data providers typically collect data in two ways: internal data collection and external data collection. Corporations report internal metrics, and analysts then use this data to create ESG scores.

Internal ESG data sources might include:

•   Operational records: Data about energy usage, water consumption, and waste generation

•   Human resource systems: Information on workforce diversity, employee turnover, training programs and labor practices

•   Governance documentation: Internal policies, executive compensation details, and ethics guidelines

•   Sustainability reports: Quarterly or annual reports compiled by the company detailing ESG initiatives, progress, and performance metrics

•   Risk management logs: Records of ESG-related risks, such as compliance breaches or environmental incidents

By contrast, external ESG data might include:

•   Third-party data providers: platforms such as Bloomberg, Refinitiv, and MSCI offer ESG ratings and benchmarks based on public disclosures and proprietary data

•   Regulatory filings: mandatory submissions to bodies such as the SEC or other regulators, including climate risk disclosures or governance structures

•   Industry benchmarks: reports from trade associations or frameworks such as the Global Reporting Initiative (GRI) that offer comparative ESG performance metrics across sectors

•   Stakeholder feedback: input from customers, suppliers, or communities, often gathered through surveys or public forums

•   NGO and media reports: Independent assessments of a company’s ESG impact, such as carbon footprint analyses, published by environmental groups or journalists

Internal data collection, which relies on corporate self-reporting, may include a months-long lag or longer, if ESG disclosures are due annually, say. External data reports can be closer to real time.

Types of Information Data Providers Collect

The data that these companies gather revolves around three broad categories of socially responsible investing.

1. Environmental Data

This category includes information about how companies impact the natural world: e.g., a company’s carbon emissions, water usage, energy consumption, waste management practices, and the use of renewable energy.

For example, a large tech company may report efforts to reduce carbon emissions through renewable energy initiatives with measurable targets. Or a manufacturing firm might disclose its use of sustainable raw materials, or improved shipping standards.

Data providers often gather this information from publicly available sources such as company reports, regulatory filings, and third-party audits.

2. Social Data

Social factors reflect how a company treats its employees, customers, and the communities in which it operates.

Key indicators might include:

•   Employee diversity

•   Workplace safety

•   Human rights policies

•   Consumer protection

•   Community engagement or corporate social responsibility (CSR) initiatives

For example, a company’s efforts to implement fair labor practices, ensure diversity in its workforce, or contribute to local community projects could be significant. ESG data providers may use surveys, direct company disclosures, or third-party assessments to capture this data.

3. Governance Data

Investors need to know whether a company’s leadership is committed to transparency, fairness, and ethical business practices, thus governance focuses on how a company is managed and how executives run its operations. This could include data about:

•   The composition of the board

•   Executive compensation

•   Shareholder rights

•   Anti-corruption practices

•   Internal auditing

For instance, a company that provides detailed information about its board diversity or its process for tackling corruption will likely score higher on governance metrics.

In addition to these core metrics, many ESG data providers also track how companies handle controversial issues such as labor violations, environmental disasters, or corporate scandals. This additional layer of insight can help investors avoid companies that can be exposed to reputational or financial risks.

Recommended: Sustainable Investing for Beginners

Top 5 ESG Data Providers

There are dozens of ESG data and rating providers, each with different pricing models, specialties, and methods, and businesses may turn to specific providers for a variety of reasons. Many businesses actually work with multiple data providers to compile a comprehensive look at their ESG practices. The following are some of the most well-known ESG data providers currently.

1. Morningstar Sustainalytics ESG Risk Ratings

Sustainalytics is a subsidiary of Morningstar, the financial industry ratings firm. Morningstar Sustainalytics supplies ESG data and ratings to institutional investors and companies. With over 800 research analysts, covering 13,000 companies, Sustainalytics is a leader in providing high-quality, analytical environmental, social and governance (ESG) data.

Data sources include regulatory filings, company reports, NGO reports/evaluations, as well as industry associations and public and media documents.

2. MSCI ESG Ratings

MSCI is one of the largest ESG data providers. It assesses and provides ESG reporting for over 17,000 issuers and 999,000 securities worldwide. Its ratings serve as a barometer of a company’s resilience in the face of ESG risks.

The MSCI ESG ratings are an aggregate of a company’s scores in all three ESG pillars. Ratings range from laggards to leaders using a letter-based scale: CCC to AAA.

3. Bloomberg ESG Data

Bloomberg ESG Data collects data on environmental, social, and governance factors from more than 16,000 companies in 100+ countries. Bloomberg ESG was named the 2024 ESG Data Provider of the Year for the Americas by Environmental Finance, an industry news and analysis site, and it seeks to deliver a holistic assessment of the ESG risks companies face, as well as projections in light of possible climate events.

In addition, Bloomberg ESG data can be used in conjunction with financial analysis to provide a 360-degree view of a company’s ESG strengths and weaknesses.

4. Moody’s Analytics ESG Score Predictor

You may know Moody’s for its credit ratings and securities risk analytics, but it also offers sustainability scoring, as well as scores reflecting an organization’s climate risk factors.

Like many data providers, Moody’s Analytics ESG Score Predictor uses a proprietary methodology. Their integrated approach combines Moody’s own ESG data, along with socioeconomic and environmental metrics, and credit risk analysis to provide a standardized scoring model, available across the universe of public and private companies.

5. S&P Global ESG Scores

By measuring a company’s management of material ESG risks, as well as ESG impacts and opportunities, the S&P Global ESG Score is able to provide a relative scoring model that seeks to compare company performance against its industry peers.

The S&P Global ESG Score takes into account both in-depth company engagement via the question-based S&P Global Corporate Sustainability Assessment (CSA), as well as internal company reports, media and stakeholder analysis, and various modeling approaches.

Important to this measure is the double materiality model: meaning that an ESG issue is considered to be material if it has major repercussions in terms of the ecosystem (or society), as well as a significant impact on a company’s potential performance and/or competitive position.

💡 Quick Tip: Building a long-term portfolio with a focus on sustainability involves not only considering ESG metrics. Individuals investing online should also keep in mind traditional financial fundamentals and industry risk factors, in addition to their own time horizon and tolerance for risk.

What Investors Should Consider When Reviewing Data Providers

Above all, data has to be useful. Thus, when selecting a data provider — or reviewing ratings from a provider — it’s important to consider which data the provider gathers and how they analyze the information.

Data Frameworks

To improve the quality and standardization of ESG data, a number of ESG frameworks have been developed and adopted over the last decade or more. These frameworks include criteria and metrics to help companies report their progress toward different ESG targets.

Despite the number of organizations that have created ESG frameworks in recent years, there is a lack of commonly upheld standards to ensure that companies are accountable, and that investors have access to valid information to help guide their ESG investment choices.

In March of 2024, the Securities and Exchange Commission (SEC) set forth ESG disclosure rules for U.S. companies. But a month later, the rules were dropped owing to legal challenges from business lobbyists and others. In May of 2026, the SEC proposed rescinding these rules, saying they were too burdensome and costly.

Nonetheless, even without an official framework for evaluating companies’ ESG standing, many firms are turning to voluntary ESG frameworks, including:

•   Task Force on Climate-related Financial Disclosures (TCFD)

•   Sustainability Accounting Standards Board (SASB)

•   Global Reporting Initiative (GRI)

•   International Financial Reporting Standards (IFRS)

Recommended: What Is Green Investing?

How ESG Data Is Analyzed

Analyzing and distilling this information into actionable insights is no easy task, and it requires a combination of quantitative and qualitative techniques.

1. Scoring Models and Ratings

The most common approach used by ESG data providers is to assign scores or ratings to companies based on their ESG performance and/or risk mitigation efforts. These scores can vary widely, and they often provide investors with a simple, at-a-glance view of a company’s ESG standing.

For example, a company might receive a score from 0 to 100, where 100 signifies excellent ESG performance and 0 signifies poor performance. The scoring systems are typically weighted, with each ESG category receiving a different level of importance based on the company, the industry, or the provider’s methodology.

However, these scores are not universally agreed upon. For instance, Sustainalytics might rate a company differently from MSCI because each provider uses its own set of criteria and weights.

In addition, scoring models often vary by industry since the materiality of certain ESG factors can differ across sectors. For example, environmental concerns might be more significant in the oil and gas sector than in the tech sector, where governance or social factors might be more material.

2. Risk Assessment

ESG data providers can also perform risk assessments to gauge how a company might be impacted by various ESG factors in different scenarios. This could involve simulating potential events where a company faces more stringent environmental regulations, social unrest, or governance challenges.

The goal is to anticipate the long-term risks that could affect the financial health of the company. For example, a company that has a poor track record of dealing with climate-related risks could be stress-tested to gauge how new environmental regulations might impact its profitability.

3. Materiality Mapping

ESG data providers often use materiality maps to identify which ESG factors are most important to a particular industry or sector. This concept of materiality, as noted above, refers to how significant a particular ESG issue is in influencing a company’s financial performance or its ability to generate long-term value.

A materiality map helps ensure that ESG scores reflect the most relevant risks and opportunities facing that company. For example, water scarcity might be highly material to a beverage manufacturer, but less so to a software company.

4. Big Data and AI

Some of the newer players in the ESG data space are leveraging technology such as artificial intelligence (AI) to crunch vast amounts of data, including news articles, social media posts, and regulatory filings. AI can help pinpoint trends, detect emerging risks, and even help anticipate future ESG performance in some cases.

Natural language processing (NLP) algorithms, for instance, can scan through thousands of reports and news sources (as well as consumer sentiment) to detect potential ESG risks before they make headlines.

The Takeaway

Looking at ESG data, ratings, and reports can be informative for investors looking to make decisions on more than just financial metrics. Sustainability is likely to increase in popularity and importance over time, so the quality and prevalence of ESG data may continue to rise.

To understand the ESG data and ratings you’re looking at, it’s a good idea to check out the data provider and learn about their methods and frameworks for aggregating and analyzing data.

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FAQ

Why do companies receive different ESG ratings from different providers?

Environmental, social, governance (ESG) data providers often use different methodologies, data sources, and weighting systems when evaluating companies. As a result, the same company may receive different ESG scores depending on which provider is conducting the assessment.

Where do ESG data providers get their information?

Environmental, social, governance (ESG) data providers collect information from a variety of sources, including company reports, regulatory filings, new articles, and third-party databases. Some providers also use artificial intelligence and data analytics tools to help gather and evaluate ESG-related information.

Can investors rely on ESG ratings when choosing investments?

Environmental, social, governance (ESG) ratings can be a useful starting point for comparing companies’ environmental, social, and governance practices. However, because ratings can vary between providers, investors may want to review multiple sources and conduct additional research before making investment decisions.

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