At Intrinio we're dedicated to keeping you informed about the latest trends in the world of finance. Today, we're exploring the world of ESG investing, which has seen tremendous growth in recent years. In fact, ESG investing has become so popular that it's no longer a niche strategy; it's now considered mainstream.
Understanding the ESG space, including ESG data, is critical for fintech companies, investors, and app developers alike. Demand for this type of information has skyrocketed, and whether or not you believe in the social or economic impact of these metrics, they are demanded by today’s investors.
As we look ahead to 2023, here are some key ESG investing trends to keep an eye on.
One of the biggest challenges facing ESG investing has been the lack of transparency and standardization across the industry. This has made it difficult for investors to compare different ESG funds and strategies, and has led to concerns about greenwashing (when companies make false or misleading claims about their environmental or social impact).
In 2023, we expect to see greater transparency and standardization in the ESG space. This will be driven by increased demand from investors for more information about the ESG factors that are being considered in investment decisions, as well as efforts by regulators to ensure that companies are accurately reporting their ESG performance.
While environmental factors have historically been the primary focus of ESG investing, we expect to see increased attention on social factors in 2023. This is due in part to the COVID-19 pandemic, which has highlighted the importance of issues such as healthcare access, worker safety, and income inequality.
Investors are becoming increasingly aware of the social impact that companies have on their employees, customers, and communities, and are looking for ways to invest in companies that are making a positive social impact. This trend is likely to continue in the coming years, with investors seeking out companies that are focused on issues such as diversity and inclusion, human rights, and community development.
As ESG investing becomes more mainstream, we expect to see growing demand for ESG data and analytics. This will be driven by investors who are looking for more detailed information about the ESG factors that are being considered in investment decisions, as well as by asset managers who are looking for ways to incorporate ESG factors into their investment strategies.
In response to this demand, we expect to see increased investment in ESG data and analytics platforms, as well as a greater focus on developing standardized ESG metrics that can be used across different companies and industries.
As the amount of ESG data continues to grow, we expect to see increased use of AI and machine learning in ESG investing. These technologies can help investors to identify patterns and trends in ESG data that might be difficult to detect using traditional methods.
For example, AI and machine learning can be used to analyze satellite imagery to assess a company's environmental impact, or to analyze social media data to assess a company's reputation among customers and employees. This type of analysis can provide investors with a more comprehensive understanding of a company's ESG performance, and can help to identify potential risks and opportunities.
Finally, we expect to see greater integration of ESG factors into investment processes in 2023. This will be driven by the growing recognition that ESG factors can have a material impact on a company's financial performance, and by the increasing demand from investors for ESG-focused investment strategies.
As a result, we expect to see more companies incorporating ESG factors into their investment decision-making processes, and more asset managers developing ESG-focused investment strategies. This will help to mainstream ESG investing even further, and will help to ensure that companies are held accountable for their environmental and social impact.
In conclusion, the ESG investing landscape is evolving rapidly, and we expect to see significant changes in 2023.
If you work at a fintech company, it’s increasingly critical that you make ESG information available to your users. Todays’ investors expect to be able to view, analyze, and take into consideration critical ESG factors in their resarch and investing activities. If fintech app developers aren’t integratin this data into their views and display, they are already behind.
Finding a reliable source of ESG data is important, and you should choose a data provider very carefully. At Intrinio, we are proud to offer one of the industry’s most robust and highest quality ESG data feeds via our partners at CSR Hub. We make accessing and integrating this data super quick and affordable. If you are interested in taking a free trial of this data set, message our team today.