ESG data – an emerging opportunity

AMR’s information team believes that ESG is a substantial, growing market that is here to stay.

ESG adoption will remain a priority across the investment value chain, irrespective of market turmoil. With a fragmented supplier landscape and exit paths to industry players, we see ESG as an emerging opportunity for private equity.   

What is the ESG data market?

Environmental, social, and governance factors (ESG) data is used to assess the sustainability and ethical conduct of a company.

Investors use ESG data to support ‘responsible investing’, an increasingly important aspect of investment strategy and portfolio composition and management.

Why is ESG data exciting?

Responsible investing is growing fast, fuelled by robust growth drivers:

  1. increased recognition from investors that ESG factors have a material impact on risk and return
  2. impending ESG regulation (e.g. amendments to MiFID II)
  3. customer preference for responsible investing amongst millennials

In line with this, global spend on ESG data across the investment value chain has been increasing rapidly

Who are the suppliers of ESG data?

The market for ESG data is split between bulge bracket full-service FS data providers (e.g. S&P, Moody’s, MSCI, Refinitiv, IHS Markit) and specialised ESG vendors.

The specialists include an ecosystem of relatively early stage fintechs using cutting edge data technologies to provide new ESG data points and analytics.

There have already been a number of exits as full-service providers seek to gain ESG capabilities to fulfil growing customer demand. Though currently there is no stand-out player or data standard by which others are judged.

What is the PE play?

To date, acquisitions have been led by trade buyers. Their primary goal has been to add capabilities and cross-sell.

We think that that as the ESG data market matures, PE will develop a growing right to play and create value, whether through investment, buy-and-build, or a consortium-led approach.

Why AMR?

AMR’s information team has built deep expertise across a range of information verticals.

We have worked consistently with world-leading information groups for over 30 years providing strategy, development and transaction support. We have also supported 100 private equity funds.

Please get in touch so we can provide more insight to the opportunity in ESG

Denzil Rankine
Executive Chairman
AMR International
denzil.rankine@amrinternational.com

About AMR International

AMR is a boutique strategy consultancy with a 30-year track record in buy and sell-side commercial due diligence, specialising in Technology, Information and Events. In recent months, we have supported three out of the top five global private equity firms. We are proud that clients turn to us for transaction support and strategies that accelerate company growth. AMR has offices in London, New York, Paris and New Delhi, as well as on-the-ground experience in 40 plus countries.