Top 5 ESG Data Providers and What to Look For

By Laurel Tincher. January 26, 2025 · 10 minute read

This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Top 5 ESG Data Providers and What to Look For

ESG (environmental, social, governance) 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 who 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.

Key Points

•   With the growing interest in ESG strategies, investors need accurate ESG data and scoring measures to evaluate companies.

•   Today there are over 100 providers who collect, analyze, and distribute information about companies’ ESG performance and risk mitigation efforts.

•   In the absence of standardized ESG frameworks, many ESG data providers compile company reports, regulatory filings, industry reports, as well as publicly available data to create proprietary scoring methods.

•   ESG data providers may cover specific industries or regions, but the larger providers generally aim to evaluate companies more broadly.

•   A growing number of ESG data providers are incorporating artificial intelligence to add more dimensions to their analytic capabilities.

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 like 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 AI-driven insights.

How ESG Data Is Collected

ESG data providers typically collect data in two ways: inside-out and outside-in. Corporations report internal metrics, and analysts then use this data to create ESG scores.

Inside-out ESG reports might include:

•   Environmental management systems (EMS): e.g., waste management, carbon emissions, adherence to clean air and water standards

•   Data on a company’s governance or financial performance, including security and transparency around accounting

•   Data about the workforce: e.g., fair labor practices, safety standards, working conditions

•   Data on corporate leadership, including information on executive compensation.
By contrast, outside-in ESG data might include:

•   Metrics and information derived from physical sources outside the organization (e.g. sensors, meters)

•   Non-physically sourced data from third-party reports, including traffic and weather data, etc.

•   Traditional and social media reports and commentary on an organization’s ESG efforts

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

💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

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 like 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. 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. They assess and provide ESG reporting for over 8,500 companies around the world, in addition to thousands of equity and fixed-income funds. Their 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 15,500 companies in 100+ countries. Bloomberg ESG was named ESG Data Provider of 2024 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 more 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 a 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: For investors who want a diversified portfolio without having to manage it themselves, automated investing could be a solution (although robo advisors typically have more limited options and higher costs). The algorithmic design helps minimize human errors, to keep your investments allocated correctly.

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 insure that companies are accountable, and that investors have access to valid information to help guide their ESG investment choices.

In March of 2024, the SEC did 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.

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 Integrated Reporting Framework (IIRC)

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 like artificial intelligence (AI) to crunch vast amounts of data, e.g., 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.

Ready to start investing for your goals, but want some help? You might want to consider opening an automated investing account with SoFi. With SoFi Invest® automated investing, we provide a short questionnaire to learn about your goals and risk tolerance. Based on your replies, we then suggest a couple of portfolio options with a different mix of ETFs that might suit you.


Open an automated investing account and start investing for your future with as little as $1.


Photo credit: iStock/cofotoisme

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOIN0722048

TLS 1.2 Encrypted
Equal Housing Lender