Part 3.1: Sources of data and collection processes

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.

Which data sources are used by providers?

Outstanding questions

We would like to know from research providers what types of data they collect, what sources and channels they use to receive it and how this is likely to change in the future.

What we (think we) already know => Context

A large majority of information gathered and published on a given company by sustainable investment research providers originally comes from the company itself (even if it may travel via third parties to reach the provider ).  There are two notable exceptions to this:

  • web-crawled 'controversies' information which typically comes from news reports
  • technologically derived data (such as satellite images)

The former is of particular frustration to companies.  The latter is at an early stage, we believe, but is interesting and merits monitoring.

Company-sourced data can come via several routes:

  • From company regulatory filings
  • From company reports, including sustainability reports
  • On a company’s website
  • From a company investor day or AGM
  • From a company presentation
  • From a one-on-one meeting with a company
  • From other company filings (eg questionnaires, trade groups etc)

Some of this data may then be assessed by third parties before being included in a rating. For example, NGOs may assess a company’s policy on a specific issue and rank the company accordingly. This ranking or score may be integrated into an ESG rating.

Under what circumstances / in what issue areas do research providers use estimates to cover gaps? What percentage of estimates are generated in-house and what percentage are sourced from third-parties?

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Outstanding questions

We would like to know from research providers when, why and how much they estimate data.  Also, we are interested in where the estimates come from and how they are managed.

What we (think we) already know => Context

For many years, research providers have been using sector comparisons to estimate gaps in carbon reporting. Whilst somewhat rudimentary a few years ago, this modelling has improved considerably. We believe that most organisations generate these estimates themselves in-house, using proprietary methodology.

We assume estimates are used to cover gaps on other environmental, social and governance issue areas, but we would like clarity on:

  • Why (and in which areas) estimates are needed
  • How such estimates are typically made
  • Whether these estimates are generated in-house or bought in, and what the quality control process is.