A current study of ESG reporting by 4,500 US and European companies finds between 50 percent and 75 percent of 2022 ESG data reported was unnecessary to comply with regulations and satisfy the guidelines of relevant investment funds. Yet companies are outdoing each other in producing sustainability reports of 200-300-pages, which makes it difficult for investors to wade through the data noise.
The average listed company spends $675,000 annually on ESG data and ratings, with asset managers shelling out $1.4 mn, according to a survey by the SustainAbility Institute by ERM. This stands to increase as 92 percent of companies planned to spend 10 percent more in 2023 and 18 percent expected to increase their expenses by 50 percent, according to Bloomberg and Adox Research.
