A new report from Opimas states that the value of ESG data could top $1 billion by next year. The firm’s newest report  ESG Data Market: No Stopping Its Rise Now, says that the market topped $617 million in 2019. The research group projects annual growth of 20%, and 35% growth for ESG indexes.

The new Opimas report states that the bulk of the buying will come from Europe. Roughly 60% of demand will come from European firms, primarily due to regulations. Asset managers must incorporate ESG considerations into their fiduciary duties by the end of next year.

North American firms will comprise 33% of demand. Asian companies will represent the final 7% of demand.

Opimas on ESG Demand

The report has broken the provider firms into five different categories.

• Generalists like Bloomberg, Refinitiv or MSCI;
• ESG research firms or specialists;
• Stock exchanges;
• Asset managers that have experience in ESG data, ratings and analytics; and,
• Credit rating firms like Moody’s

Finally, Opimas managing director and report co-author, Axel Pierron said that incomparable data would make it harder to succeed for managers.

“The issue ahead is that the industry is likely to see a massive reallocation of portfolios toward companies that have better ESG ratings solely based on incomparable data. Investors will end up with stocks that are overpriced due to — at best — incomplete or outdated data,” Pierron said in a statement.

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