Today's financial analysts and hedge fund managers are increasingly turning to a shared value model and evaluating assets from an environmental perspective., social and corporate governance (ESG) using alternative data. This approach allows financiers to reveal a more detailed picture of the organization., its financial risks and future investment potential. With the development of technology, data-driven, an almost infinite amount of publicly available information can be collected from the world's largest database – Of the Internet – and analyze it to obtain information on financial estimates.
Since the adoption of the UN Principles for Responsible Investment in 2006 year, interest in ESG in the financial services sector has increased dramatically. Actually, taking into account the ESG factors, a total of more than $20 trillion in global assets under management – or about a quarter of all global assets, managed by professionals.
Alternative ESG data may come from various sources and include information from social media, vacancies, analytics, interviews and much more. It can help investors understand the factors, including consumer intent and public opinion, – what traditional data can't do, such as SEC data, broker forecasts and financial statements.
It is worth clarifying the difference between one-off assessments and the collection of alternative ESG data. There are many ESG data providers, and most of them use their own unique formula to calculate a single grade. While it may help investors get a glimpse of the company's overall performance, this approach does not allow them to fully understand the short and long term risks of ESG, related to investing in a specific organization. Investors need alternative datasets, and theirs is growing exponentially – Estimated, to 2024 year will be available more 5000 different alternative datasets. Huge amount of raw ESG alternate data can be collected using web platforms. However, when analyzing so many interrelated factors and with so much available data, it can be difficult to draw conclusions.. Consequently, when using web platforms, it is extremely important to first set the parameters to retrieve data, before deciding exactly, how much data is needed.