Morningstar Sustainalytics: Institutional Investors Signal Rising Demand for ESG Data Integration Amid Market Maturity
MWN-AI** Summary
Morningstar Sustainalytics has published its inaugural "State of ESG Data Survey," highlighting the growing integration of Environmental, Social, and Governance (ESG) and climate data into the investment workflows of institutional investors. The global survey collected insights from 145 financial market participants, including asset managers, banks, and pension funds across EMEA, the Americas, and APAC. A significant 40% of respondents manage over USD 50 billion in assets, with EMEA representing the largest segment, reflecting its advanced ESG frameworks.
Key findings illustrate a shift in investor expectations, as ESG analytics evolve from optional tools to essential components in investment strategies. David Pagliaro, President of Morningstar Sustainalytics, emphasized the increasing need for standardized yet forward-looking insights, particularly regarding climate risks and nature impacts. Investors are prioritizing high-quality, comparable data to navigate regulatory frameworks and enhance long-term value creation.
Despite this maturity in demand, challenges persist. Nearly half of the respondents pointed to data coverage gaps, with data quality and vendor inconsistencies also cited as significant hurdles. The desire for forward-looking metrics has grown, with transition risk models regarded as particularly valuable. Additionally, complex regulatory environments have heightened the demand for robust fund-level reporting capabilities.
The survey also recognizes the difficulties surrounding ESG data in private markets, where data availability is often limited. However, investors are increasingly seeking regulatory-aligned datasets, greenhouse gas emissions data, and ESG risk ratings, indicating a push for deeper insights and seamless integration of ESG considerations across all asset classes.
Overall, the 2025 survey underscores the financial industry’s decisive shift towards a more mature approach to ESG data integration, reflecting a critical evolution in investment practices.
MWN-AI** Analysis
The recent findings from the Morningstar Sustainalytics' "State of ESG Data Survey" illuminate a critical shift in the investment landscape where Environmental, Social, and Governance (ESG) metrics are becoming integral rather than supplementary. Institutional investors appear to be placing greater emphasis on integrating ESG data directly into their investment workflows, signaling a move towards more sustainable and responsible investment strategies.
Given the report's insights, financial analysts and institutional investors should consider prioritizing the incorporation of standardized ESG disclosures into their investment processes. The survey indicates that 47% of respondents are hindered by gaps in ESG data coverage, highlighting an urgent need for comprehensive data solutions. Investment firms must seek partnerships with providers like Morningstar Sustainalytics to ensure they have access to robust and high-quality data, particularly as regulatory pressures escalate.
The emphasis on forward-looking climate metrics is also critical. The demand for predictive tools—most notably in relation to transition risk models—demonstrates an evolving need for data that emphasizes long-term climate resilience and scenario-based decision-making. Investors should focus on acquiring such predictive analytics to align portfolios with future risks and opportunities.
Moreover, as the integration of ESG data expands into private markets and alternative asset classes, challenges related to data accessibility remain. The findings indicate a robust demand for greenhouse gas emissions data and ESG risk ratings, particularly as institutions apply a holistic approach to sustainability across their entire portfolios.
In conclusion, with the financial industry maturing towards an ESG-centric focus, investors who proactively adapt to these trends—by enhancing data integration, advancing predictive analytics, and addressing data quality issues—will be well-positioned to thrive in a rapidly evolving market landscape.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
New global survey shows ESG and climate data moving from optional add-ons to core components of investment workflows.
Morningstar Sustainalytics, part of Morningstar, Inc. (Nasdaq: MORN), a leading global provider of ESG data, research, and ratings, today released findings from its inaugural State of ESG Data Survey , revealing a financial industry increasingly dependent on actionable sustainability information. Morningstar Sustainalytics clients surveyed cited ongoing challenges around data quality and coverage, increased demand for regulatory-aligned insights and a shift toward forward-looking climate and nature-related analytics.
The global quantitative survey collected responses from 145 financial market participants — including asset managers, banks, pension funds, wealth managers and other financial institutions — across EMEA, the Americas, and APAC.
Participants spanned a wide range of size, with 40% managing more than USD 50 billion in assets and 24% managing under USD 1 billion. EMEA accounted for the largest share of respondents (51%), reflecting the region’s strong regulatory momentum and advanced ESG practices.
David Pagliaro, president of Morningstar Sustainalytics, commented: “Our first State of ESG Data Survey shows that standardized ESG disclosures remain critical. However, investors increasingly need forward?looking insights – particularly on climate risks and nature impacts. Even with shifting political rhetoric in some markets, the underlying demand has not changed: investors want high?quality, comparable data to understand risks, support meeting regulatory obligations, and to help create long?term value.”
The survey reveals that institutional investors are embedding ESG and climate information directly into investment processes, risk management tools and regulatory reporting workflows.
Yet consistent obstacles remain:
- 47% cited gaps in ESG data coverage
- 41% suffer from data quality issues
- 40% pointed to inconsistencies across vendors
Forward-Looking Climate Metrics in Demand
Forward-looking information is also gaining prominence. While International Sustainability Standards Board (ISSB) disclosures (73%) and sustainable bond data (68%) remain must have data sets, transition risk models were the area most frequently identified as uniquely valuable (35%). These findings suggest that investors increasingly need predictive tools to support long-term climate resilience and scenario-based decision making.
Nearly half of respondents ranked fund-level reporting capabilities among their top three needs—underscoring the increasing complexity of regulatory disclosures and the demand for end-to-end data integration.
ESG Data in Private Markets & Alternative Asset Classes
Private markets were identified as one of the most challenging areas for ESG and climate data. As investors pursue a whole portfolio approach to sustainability, many are expanding beyond listed markets into private assets where data availability remains limited.
Alongside private market data needs, respondents highlighted rising demand for:
- Regulation aligned datasets (58%)
- Greenhouse gas emissions data (56%)
- ESG risk ratings (49%)
With investors calling for deeper insights, stronger data foundations and more seamless integration, the State of ESG Data Survey 2025 underscores a market moving decisively toward maturity.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment insights in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, institutional investors in the debt and private capital markets, and alliances and redistributors. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $378 billion in AUMA as of Dec. 31, 2025. The Company operates through wholly-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company . Follow Morningstar on LinkedIn @Morningstar.
About Morningstar Sustainalytics
Morningstar Sustainalytics is a leading ESG data, research, and ratings firm that supports investors around the world with the development and implementation of responsible investment strategies. For more than 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Morningstar Sustainalytics works with hundreds of the world's leading asset managers and pension funds who incorporate ESG information and assessments into their investment processes. The firm also works with hundreds of companies and their financial intermediaries to help them consider material sustainability factors in policies, practices, and capital projects. Morningstar Sustainalytics has analysts around the world with varied multidisciplinary expertise across more than 40 industry groups. For more information, visit www.sustainalytics.com .
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View source version on businesswire.com: https://www.businesswire.com/news/home/20260303365751/en/
Louis Hogan, louis.hogan@morningstar.com , +44 753454 40330, Communications Manager Morningstar Sustainalytics
FAQ**
How is Morningstar Sustainalytics, part of Morningstar Inc. MORN, addressing the reported data quality issues cited by 4of survey participants to enhance the reliability of ESG data for investors?
What specific strategies is Morningstar Inc. MORN implementing to improve data coverage, given that 47% of respondents in the survey indicated gaps in ESG data availability?
With forward-looking climate metrics being in high demand, how is Morningstar Sustainalytics adapting its offerings to provide predictive tools that cater to these needs for institutional investors?
As the survey highlights challenges in obtaining ESG data for private markets, what initiatives is Morningstar Inc. MORN pursuing to expand accessibility and quality of sustainability information in this area?
**MWN-AI FAQ is based on asking OpenAI questions about Morningstar Inc. (NASDAQ: MORN).
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