European Commission Study on Sustainable Investment Data, Ratings and Investment Research

The European Commission has contracted SustainAbility (an ERM Group company) and a consortium of sustainable investment specialists to conduct an in-depth study (details here) to:

  • provide a state of play of the sustainability-related products and services market,
  • establish an inventory and classification of actors and sustainability products/services available in the market,
  • explore the use and quality of sustainability-related products and services, and
  • provide the European Commission with recommendations and best practices to stimulate demand and improve the quality of supply.

By doing this, the European Commission has:

  • emphasised the role that it sees for finance in supporting the transition to a low-carbon, more resource-efficient and sustainable economy
  • given the sustainable industry a tremendous opportunity to understand itself and to prepare its value chain for further development and growth.

We consider ourselves privileged to be part of this process and invite all firms with a current or planned interest in sustainable investment value chain to join our research process.

Our approach: absolute independence, maximum participation, full transparency, total efficiency

We approach our research task in a spirit of collaboration and plan to share as much of what we find (subject to commercial confidentiality) with participants in the research. On the pages that follow, we:

  • describe what we think we already know about the market
    • ... to share our current understanding of the market and the issues that the EC is interested in - for your benefit and so that you can see where we may need correcting
  • outline what we think we still need to find out
    • ... to show you where there are gaps in our knowledge that need filling
  • invite
    • ... all senior industry professionals to participate

Your contribution: Please share your experience and ideas

If you are the head of ESG / sustainable investment within an asset manager, asset owner or research provider (ESG agencies, sell-side brokers, credit ratings agencies and independent providers) or

… if you are an investor relations officer or CSR manager at a listed company that has dealings with … or expects to have dealings with ESG / sustainable investors in the near future

… we need you to participate in this analysis of the sustainable investment data, ratings and research process by sharing your experience and ideas VIA HERE or by emailing us This email address is being protected from spambots. You need JavaScript enabled to view it..

Also, if you are not a team head or someone with direct responsibility, but know someone in your company who is, please forward this page to them with the words "This study is important.  We should contribute..."

Research consortium

Headed by SustainAbility, the consortium includes Hindsight Consultancy, Institutional Investor Research, Minter Ellison and SRI-CONNECT.

Essential note

The research process, this website and all information and opinions on it have been designed by the research consortium alone.  None of the information contained herein is attributed to the European Commission.  No inference should be drawn that the European Commission endorses or even agrees with the statements made on this website or the questions asked.  This request for proposals contains the full extent of the European Commission's public views on this subject.

In this short opening section, we raise some open contextual questions and help respondents identify the type of questions that we are seeking answers for.

EC research brief

In this first part, the contractor should provide an economic overview of the state of the development of the market for sustainability research and ratings, the number and type of actors, the market trends, the fees structure, the level of competition and identify possible barriers to entry.

The study should also describe whether some national and/or international rules including, but not limited to, legislative or administrative measures could apply to sustainability-related products/services providers.

In addition, it should include an analysis of existing market standards as well as any industry initiatives on self-regulation.

In addition, the contractor should provide a summary of the main constituents of these initiatives and analyse to which extent they are used by the market.

EC research brief

The study should first try to define the main categories of sustainability-related products and services providers using a transparent categorisation method. Each category should present common characteristics and trends. The categorisation method should also take into account whether or not those providers already perform their activities under a specific EU status (such as MIFID investment firm or benchmark administrator).

The study should also examine different aspects related to the governance and organisational arrangements of the providers.  The assessment should include at least:

  • the governance arrangements,
  • the staff allocated to the preparation of sustainability-related products and services, its level of experience and seniority, and the average number of companies/assets covered - per analyst,
  • the management of conflicts of interest, and,
  • the use of a code of conduct

EC research brief

The study will identify main categories of sustainability-related products and services, using a transparent categorisation method. Each category should present common characteristics and trends.

For the purposes of the classification, the contractor should assess:

  • the objectives pursued (e.g. measure of risk, impact, performance, compliance with standards, other) by the sustainability-related products/services;
  • how the 'sustainability' considerations are measured and how Environment, Social or Governance (ESG) factors are defined, in particular the degree to which providers intend to use the future EU taxonomy13 to design sustainability-related products/services;
  • whether the sustainability-related services and products are forward (looking at future investments, targets, technological developments, climate scenarios) or backward looking (looking at history, public disclosures, activities in previous years, carbon emissions, intensity).

Furthermore, the contractor should assess whether there are differences in the methodologies deployed depending on the size of the company (e.g. SMEs vs. large companies). The contractor should also identify overall geographical, sector or size (e.g. towards bigger companies) bias in the coverage of products and services offered.

For carrying out Task 1, the contractor should contact and exchange practical experiences with sustainability experts, including:

  • researchers,
  • academicians and
  • market participants.

The development of the classification system and definition of terms should be done following interaction and conversation with the industry and having regard to the acceptance and existing use of the notions.  The study will also establish trends in the developments.


EC research brief

The study will help understand which are the data sources used by sustainability-related products and services providers such as

  • public reporting made by companies - specifying the types of reports containing the disclosures
  • questionnaires and surveys sent directly to companies
  • information gathered as a result of their engagement with companies (through meetings, interviews or workshops for example), and
  • other sources of information.

The study will also identify the percentage of estimates submitted by third party sources other than the reporting companies and assess how this impacts transparency of input data. To fulfil this task, the contractor should liaise with sustainability products/services providers as well as directly with companies.

The contractor should distinguish which kind of data comes from which source and should give a proportion of how much of the data collected by sustainability-related products and services providers comes from which source. To increase readability, it is recommended to use charts and graphs including percentages.

EC research brief

The study should analyse the process providers go through to ensure the accuracy of the data they collect and/or estimate, and the procedures for dealing with any data inconsistency (like in-house estimation models, when reported data is not available).

The study should also analyse the process providers use to ensure the quality of the assessment (like use of certification, audit or reviews by third parties).

The study will also analyse pros and cons of enhancing the quality assurance, as well as whether enhancing data quality would be required to enable informed investor decisions.


EC research brief

This task will focus on products assessing companies’ sustainability, either on the aggregated (ESG) or individual factors level (like E, S, or G) in the form of a rating, score or ranking.

This task will not apply to categories of products which do not entail the attribution of a rate, score or ranking number. The choice of products will be carried out in co-operation with the contracting authority.

The study will analyse main methods of measuring sustainability and the transparency of this process as well as of methodologies. The study will also analyse whether methodologies can be biased, and what are the consequences of the bias. It will help to understand reasons for a low correlation between results of assessments of the same company done by different providers.

The study should analyse how providers carry out their assessments, in particular:

  • what assumptions and criteria they use to measure sustainability;
  • whether they use standards (administrative, legislative, self-regulation, regional, global etc.) or taxonomies;
  • the extent to which they differentiate sustainability measurements across economic sectors;
  • the frequency of reviews of methodologies;
  • the level of disclosure and transparency of methodologies to issuers and investors;
  • frequency of updates and publications of ratings and their consequences.
    The study will also analyse pros and cons of increasing the level of transparency of methodologies.

EC research brief

The study should analyse the use of sustainability-related products/services by investors and asset managers, per categories of providers and products, and in particular:

  • to what extent investors, benchmark administrators and asset managers get data from third parties and/or directly from companies; the study will explain the role that sustainability-related products and services currently play in the flow of sustainability information from companies to investors and to what extent and why investors, benchmark administrators and asset managers rely on sustainability information provided by third parties despite the publication of sustainability information in companies’ reports;
  • the proportion of investors, benchmark administrators and asset managers which have developed in-house sustainability-related analysis and tools, compared to those that enquire for external analysis from sustainability-related products and service ;
  • factors that drive the use of sustainability-related products and services provided by a third party;
  • how a provider of sustainability-related products and services is selected;
  • to which extent investors and asset managers integrate those products/services in their investment decision-making and due diligence processes;
  • for other products/services than those referred to in section IV, the perceived degree of transparency of the methodology of the providers;
  • for other products/services than those referred to in section IV, the problems/bias identified by investors, benchmark administrators and asset managers on sustainability products/services;
  • whether the sustainability products/services correspond to the needs of investors, benchmark administrators and asset managers;
  • if investors, benchmark administrators and asset managers value the high variety of products/services offered in the market or if they prefer to see a certain degree of standardisation and

To that effect, the contractor should propose a methodology that will ensure the involvement of a representative number of:

  • asset managers (pursuing passive and active investment strategies),
  • benchmark administrators and
  • institutional investors.

The contractor should also take into account the differences between asset managers pursuing passive investment strategies and asset managers pursuing active investment strategies to answer the above- mentioned questions.

The contractor should also interview relevant NGOs on the perceived quality of sustainability-related products and services, and the bias/problems that they identified.

EC research brief

The study will explore the relationship between assessed companies and the providers of sustainability-related products and services.

The contractor is expected to explore views of companies on:

  • whether the sustainability-related products/services correctly reflect the sustainability performance of the company;
  • whether the sustainability-related products/services such as ESG ratings or scores, are a good way to assess/measure sustainability performance, or whether there are other ways;
  • the type of interactions companies and sustainability products/services providers have (e.g. regular meetings, commercial relationships, paid vs unpaid services, etc.), their frequency, and nature and at which stages of the rating process issuers are consulted and under which form (e.g. questionnaires, meetings, interviews, workshops, );
  • whether they can correct what they identify as mistakes/errors in the report or appeal the rating which is given to them;
  • whether and to what extent they think that the assessment influences their decision and approach towards the management of their sustainability risks and opportunities. The contractor shall provide some concrete examples following interviews and exchanges with

The study will also analyse the costs for companies, and costs relative to their size, of replying to multiple individual requests for information (i.e. questionnaires, surveys), and costs for rated companies of getting feedback from sustainability-related products / services providers.