The EDM Council (EDMC) has recently published a study outlining recommendations for ratings providers and data aggregators (RPDAs) regarding the significant challenges within the ESG data supply chain.
In the report titled “ESG Data Management: Rating Providers and Data Aggregators,” the EDMC, a cross-industry trade association focusing on data management and analytics, acknowledges the essential role of RPDAs in the ESG ecosystem. However, these entities are increasingly facing their own set of data and analytics difficulties.
Eric Bigelsen, EDMC’s Head of Industry Engagement and leader of the ESG workgroup, stated, “As the importance of ESG continues to rise, so too do the data management challenges encountered by RPDAs. Our objective with this research is to streamline the ESG data supply chain and establish a common framework for these organizations.”
To address the data challenges identified, the study highlights 11 critical obstacles and offers strategic recommendations for each:
1. Complexity of Standards Setting
2. Model Governance
3. Documenting Data Points to Materiality
4. ESG Metric Effectiveness
5. Data Gaps
6. Version Control
7. Changes and Trends in Source Data
8. Third-Party Data
9. Scenarios and Models
10. External Assurance of ESG Data
11. ESG Data Management Requirements
Bigelsen emphasized the importance of providing clarity in this evolving sector, showcasing the advantages of ESG in achieving sustainable outcomes. This report marks the second installment in a series of papers resulting from a comprehensive nine-month study on ESG data challenges, incorporating insights from over 80 organizations and more than 150 professionals.