ESG data: building a solid foundation - Man Group

How Man Group is turning off-the-shelf ESG data into useful and informative signals.

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ESG data have matured over the last decade. We are entering a phase where the data have both a long-enough history and broad-enough coverage to make the data interesting to quantitative investment firms. However, ESG data are qualitative, discretionary and unregulated. Indeed, the ESG data provided by vendors typically have a short history and are often retroactively collected. In this paper, Man Group discusses why taking the vendor-provided ESG data at face value can be misleading. They believe that by spending the time to understand the nuances of each vendor’s methodology and properly handling their data quirks can lead to a unique, alpha-generating dataset.

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