The 'social' dilemma: how to use data to analyse the ‘S’ in ESG – Invesco

How data sets and machine learning are being used to analyse alternative data to give investment insights.

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In a recent survey of over 356 Institutions by ESG Investing, 51% of investors found the ‘S’ in ESG to be the most difficult to analyse and embed in investment strategies. Simply put this has been because the data was more difficult to come by. So far in the endeavour to deliver ESG products, most products offered in the market have only really delivered ‘E’ (environment factors) as it was relatively easy to measure and quantify. Given the ‘S’s intangible nature, it’s has not been so easy, for example, to measure things like:

Meaning and joy.
Societal stability.
Equality and human rights.

There are several ways to analyse the ‘S’. Of course, one approach is to focus on a specific theme like sustainable food and clean water. But in a rapidly evolving landscape there’s still the question of how well you can target and deliver against your goals.

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