Institutional investors are accelerating the integration of environmental, social and governance (ESG) and climate data into core investment workflows, according to new findings released by Morningstar Sustainalytics, part of Morningstar, Inc.
The firm’s inaugural State of ESG Data Survey indicates that sustainability data is no longer viewed as an optional add-on, but as a central component of risk management, regulatory reporting and long-term value creation.
The global quantitative survey gathered responses from 145 financial market participants — including asset managers, banks, pension funds and wealth managers — across EMEA, the Americas and APAC. Of those surveyed, 40% manage more than USD 50 billion in assets, while 24% oversee less than USD 1 billion. EMEA accounted for 51% of respondents, reflecting the region’s strong regulatory momentum and comparatively advanced ESG practices.
David Pagliaro, president of Morningstar Sustainalytics, said: “Our first State of ESG Data Survey shows that standardised ESG disclosures remain critical. However, investors increasingly need forward-looking insights – particularly on climate risks and nature impacts. Even with shifting political rhetoric in some markets, the underlying demand has not changed: investors want high-quality, comparable data to understand risks, support meeting regulatory obligations, and to help create long-term value.”
The survey found that institutional investors are embedding ESG and climate information directly into investment processes, risk management frameworks and regulatory reporting systems. However, persistent challenges remain.
Nearly half of respondents (47%) cited gaps in ESG data coverage, 41% reported data quality issues, and 40% highlighted inconsistencies across vendors.
Demand for forward-looking metrics is also rising. While disclosures aligned with the International Sustainability Standards Board (ISSB) were identified as essential by 73% of respondents, alongside sustainable bond data (68%), transition risk models emerged as the most frequently cited uniquely valuable dataset (35%). The findings suggest growing demand for predictive tools that support climate resilience and scenario-based decision-making.
Almost half of respondents ranked fund-level reporting capabilities among their top three requirements, underscoring the increasing complexity of regulatory disclosures and the need for end-to-end data integration.
Private markets were identified as one of the most challenging areas for ESG and climate data. As investors adopt a whole-portfolio approach to sustainability, many are expanding into private assets where transparency and data availability remain limited.
Respondents also signalled rising demand for regulation-aligned datasets (58%), greenhouse gas emissions data (56%), and ESG risk ratings (49%).
Overall, the State of ESG Data Survey 2025 points to a market entering a more mature phase, characterised by deeper data requirements, stronger analytical foundations and more seamless integration across investment strategies.
