The Rising Cost of Investing Responsibly
Investors need more information, but it’s not clear who will end up paying for it.
Easy for investors to exclude.
Photographer: Waldo Swiegers/BloombergBoth companies and the fund managers that invest in them are under pressure to pay more attention to environmental, social and governance issues. For the former group, that requires delivering increased transparency on an ever-expanding range of metrics. For the investment crowd, tailoring strategies to address the new demands means increased spending on data — at a time when fees are slowly but steadily being eroded.
A study published this week by capital markets consultants Opimas predicts that the cost of buying ESG data will rise to about $750 million next year, an increase of almost 50 percent from last year and up by almost 300 percent since 2014.