What Is ESG Data? — A Practical Guide for Investors and Companies

Growing climate risks, changing social expectations, and increasing regulatory scrutiny are compelling investors and companies to leverage ESG data to ensure informed decision-making. However, ESG data is more than just a checklist—it’s a strategic tool. From understanding a company’s carbon footprint to identifying governance red flags or assessing exposure to human rights risks in supply chains, ESG data helps stakeholders quantify non-financial risks that can materially affect financial performance.

This guide breaks down what ESG data actually is, beyond the buzzwords, and explores six key types of Environmental, Social, and Governance data. We’ll also look at how investors use it to adjust portfolio exposure, and how companies use it to benchmark performance, uncover blind spots, and communicate clearly with regulators, clients, and shareholders.

ESG data refers to non-financial metrics that track how companies manage Environmental, Social, and Governance (ESG) risks and opportunities. It complements traditional financial data, giving stakeholders a broader view of a company’s operations and future resilience.

• Corporate Disclosures (e.g., annual reports, sustainability reports)
• Third-party Research (e.g., Inrate, MSCI, Sustainalytics)
• News/Media Coverage (for controversies or public sentiment)
• Government Filings (e.g., emissions data, legal compliance)

Each category of sustainability metrics serves a different purpose in evaluating performance and risk. Here’s a breakdown of the six most common types:

Raw (reported) ESG data comprises unprocessed figures and disclosures directly from companies.

• Examples: CO₂ emissions, board diversity, human rights policies
• Sources: Annual reports, CDP, 10-K/20-F filings
• Use Cases: Establish baseline metrics for compliance, internal reviews, and benchmarking.
• What to Watch Out for: Self-reported data can be biased or inconsistent unless verified.

Read more: Features of ESG Data & Solutions

Standardized ESG data comprises raw data reformatted into common metrics for comparison.

• Examples: GHG emissions per $1M revenue, employee turnover rate
• Sources: ESG data providers
• Use Cases: Benchmarking across industries and geographies, reducing subjectivity in analysis

Controversy data tracks ESG-related incidents that can damage a company’s reputation or signal risks.

• Examples: Oil spills, labor violations, fraud allegations
• Sources: News media, social media, AI-powered scanners, NGO databases
• Use Cases: Early warning system for investors, helps companies manage reputation and crises.

Inrate’s ESG models integrate real-time controversy tracking for the early flagging of emerging risks.Shape

ESG ratings & scores are simplified evaluations based on a company’s ESG performance across key metrics.

• Examples: ‘AA ESG Rating (MSCI)’, ‘60/100 Impact Rating (Inrate)’
• Sources: ESG rating providers
• Use Cases: Screening investments, building ESG portfolios, aligning with regulations such as Sustainable Finance Disclosure Regulation (SFDR) Data

Note: Methodologies vary across providers; hence, understanding the scoring logic is critical.

Impact/SDG-aligned ESG data assesses a company’s alignment with global impact frameworks such as the United Nations Social Development Goals (UN SDGs).

• Examples: % revenue from clean energy (SDG 7), gender equity initiatives (SDG 5)
• Sources: SDG-mapping tools, impact data providers
• Use Cases: Thematic and impact investing, communicating corporate purpose.

Inrate’s impact ratings map company activities directly to SDG targets, adding a layer of purpose to ESG analysis.Shape

Read more: ESG Scores: What is it, And How Are They Calculated?

Forward-looking ESG data comprises forecasts and targets that indicate future ESG performance.

• Examples: Net-zero pledges, climate scenario analysis (TCFD), ESG-linked executive pay
• Sources: Corporate transition plans, IEA-aligned modeling tools
• Use Cases: Long-term risk analysis for investors, credibility and leadership signal for companies

TCFD’s 2023 report showed that 70% of firms disclose climate scenarios—a significant increase from just 16% in 2017.

• Screening & Exclusion: Use controversy and rating data to filter out companies involved in harmful activities
• ESG Integration: Blend ESG metrics with financial models for a more complete risk-return view
• Thematic/Impact Investing: Build portfolios around sustainable themes using SDG and impact data
• Active Ownership: Engage with companies based on gaps identified in ESG performance

• Benchmarking: Compare ESG performance against peers using normalized data and ratings.
• Risk Management: Identify legal and reputational risks early through controversy data.
• ESG Reporting: Meet regulatory and stakeholder expectations using raw data and SDG frameworks.
• Capital Access: Strong ESG performance can attract green capital and improve financing terms.

Read more: EU Taxonomy Reporting: How Investors Can Bridge Data Gaps

• Regulators: Monitor systemic risks and policy compliance using reported and scenario-based data.
• Analysts: Evaluate long-term resilience using ESG scores and controversies.
• NGOs: Use impact and raw data to track corporate accountability.

ESG data can be complex, but when used wisely, can provide insights, resilience, and measurable impact. Whether you’re just beginning your sustainability journey or optimizing your strategy, understanding these six types of Environmental, Social, and Governance data is the first step.

Want to see how Sustainability metrics can empower your investment or reporting strategy?

Get in touch for a custom demo of Inrate’s ESG & Impact data solutions.