Morningstar Sustainalytics, part of Morningstar Inc. (Nasdaq: MORN), has released findings from its inaugural State of ESG Data Survey, pointing to a structural shift in how institutional investors integrate sustainability and climate information into investment processes.

The global survey gathered responses from 145 financial market participants across EMEA, the Americas and APAC, including asset managers, banks, pension funds and wealth managers. The results suggest ESG and climate data are no longer treated as peripheral overlays but are increasingly embedded into core risk management, regulatory reporting and portfolio construction workflows.

Demand Shifts Toward Forward-Looking Insights

While standardized ESG disclosures remain important, respondents highlighted growing demand for forward-looking climate and nature-related analytics. International Sustainability Standards Board disclosures were cited by 73 percent of participants as essential datasets, while 68 percent pointed to sustainable bond data as a priority.

Transition risk models emerged as the most frequently identified uniquely valuable dataset, cited by 35 percent of respondents. This indicates a growing emphasis on predictive tools capable of supporting scenario analysis and long-term climate resilience planning.

David Pagliaro, President of Morningstar Sustainalytics, noted that investors continue to seek high-quality, comparable data to meet regulatory obligations and support long-term value creation, even amid shifting political narratives in certain markets.

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Persistent Data Challenges

Despite rising integration, survey participants reported ongoing operational hurdles. Forty-seven percent cited gaps in ESG data coverage, 41 percent pointed to quality concerns, and 40 percent highlighted inconsistencies across vendors.

Nearly half of respondents ranked fund-level reporting capabilities among their top three needs, reflecting the growing complexity of regulatory disclosures and the need for seamless end-to-end data integration.

Expanding Into Private Markets

Private markets were identified as one of the most challenging areas for ESG and climate data availability. As institutional investors adopt whole-portfolio sustainability approaches, attention is expanding beyond listed equities into private equity, infrastructure and debt markets, where disclosure standards remain uneven.

Respondents also signaled rising demand for regulation-aligned datasets, greenhouse gas emissions data and ESG risk ratings as investors seek deeper insights across asset classes.

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A Market Moving Toward Maturity

The survey findings indicate a maturing ESG data market in which sustainability analytics are increasingly tied to governance, risk management and compliance requirements rather than viewed as optional enhancements.

With 40 percent of respondents managing more than USD 50 billion in assets and EMEA representing the largest regional share, the results reflect both regulatory momentum and institutional scale driving ESG integration.

As disclosure frameworks expand and investor scrutiny intensifies, the integration of standardized, forward-looking ESG data appears set to become a foundational component of institutional investment decision-making.

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