UK-based Neudata, which specializes in identifying alternative data sources, recently announced that it has launched a new product to help firms find, manage and compare new sources of alternative data aligned to key ESG factors. The new service is dubbed Neudata Scout ESG.
Neudata’s Newest Product Launch
Last week, Neudata launched Neudata Scout ESG, the latest in its Data Scout line of business. This new product was designed to help hedge funds, private equity firms, venture capitalists, consultancies and corporations source and compare new sources of ESG related data. Users of the new product will gain access to over 400 ESG-relevant datasets, which are classified across different ESG themes and the 17 United Nations’ Sustainable Development Goals.
A growing number of firms are using alternative data sources to comply with government regulations, fill in disclosure gaps, or build their own ESG evaluation models. For example, asset managers that have to comply with reporting requirements under the EU Sustainable Finance Disclosure Regulation (SFDR) can use Neudata Scout ESG to find datasets to help them do so.
Neudata’s head of ESG research, Julia Asri Meigh explained this development, “Any firm in the EU with an ESG-labelled investment product needs to disclose certain metrics across the EU Taxonomy, some of which can prove difficult to track down without specialised data scouting tools like Neudata Scout ESG. These tools can help firms report in line with various ESG frameworks like biodiversity and human capital metrics.”
Regulations, like the new reporting requirements under the EU Sustainable Finance Disclosure Regulation (SFDR) which is slated to go into effect on June 30, 2023 have created a bonanza for ESG data providers. This development has contributed to the torrid growth in the number of ESG related datasets and has led to a sharp increase in spending on ESG data.
Consulting firm Opimas estimates the ESG data market was $617 million in 2019, including ESG indices. Excluding index-related revenues, ESG data spending was estimated around $430 million and projected to grow to $520 million in 2020 and $620 million in 2021.
The explosion in ESG data spending and the number of new ESG datasets has also contributed to the growth of tools and marketplaces to help potential users find and vet this data. The launch of the Neudata Scout ESG product is a natural extension of Neudata’s business and is the latest entry into this growing segment of providers. Substantive Research’s ESG Dashboard, Arabesque’s ESG Book, and Nasdaq’s ESG Data Portal are just a few in the growing list of other solutions to help firms find the right ESG data to meet their needs.