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Opimas: ESG Data is Now Worth It

    Highlights and insights:

    “Consideration of Environmental, Social and Governance (ESG) factors in the investment process has gone mainstream.  In fact, 2021 was a landmark year for ESG data vendors.

    Based on publicly available information, interviews, as well as companies’ actual or estimated revenues, Opimas finds that the global market for ESG data surpassed US$1 billion for the first time in 2021. Supported by an impressive 28% annual growth rate over the past five years, the market could exceed US$1.3 billion by 2022.

    ESG research and analytics, which includes ESG ratings, raw data and other dedicated solutions, represents around 70% of the market. However, ESG indices, which make up the other leg of the market, have grown even faster. This is due to the broad success of ETFs and the global increase in the number of indices. With a 38% annual growth rate over the past five years, the ESG indices segment surpassed US$300 million in 2021.

    The top three ESG data providers, namely MSCI, ISS ESG and Sustainalytics, account for about 60% of the market. This is partly the result of the impressive number of ESG-related mergers and acquisitions that took place over the past decade. Despite its concentration, the ESG data market remains relatively crowded, with many boutique firms and upstarts.”

    (Author summary)

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