New resources for sovereign ESG data and investors

A new web-based platform aims to make sovereign ESG data from the World Bank more accessible and transparent.

Growing concerns over climate change and other environment and social issues are having a big impact on how today’s investors think about their investment strategies. According to a recent global survey by FTSE Russell, 53% of asset managers are currently implementing or evaluating ESG considerations in their investment strategies. A number of Environmental, Social, and Governance (ESG) frameworks have emerged to help guide investment strategies for corporate and sovereign bonds, as well as equities.

But how is ESG defined and measured? And where do the data come from? To the first question: there are many definitions of ESG that are potentially relevant to investing, but no common standards or harmonized data. Data users, such as ESG research firms, institutional investors, financial institutions and others develop their own, often proprietary, models and approaches—which is beneficial in terms of innovation and differentiation, but a challenge in terms of transparency. To the second question: while ESG data come from a variety of sources, it turns out that one major source of sovereign ESG data is the World Bank. According to a 2018 stock-taking exercise, major sovereign ESG research products obtain between 30% and 85% of their data from the World Bank’s open data catalog.

The 2018 stock-take also revealed several gaps related to ESG data. The data currently obtained from the World Bank are scattered across different independently-updated databases, instead of being available in a single location. Gaps in both country and temporal coverage are common, due to a range of reasons. In some cases, data used for ESG analysis had been discontinued or deprecated in favor of more up-to-date indicators. Furthermore, users have insufficient information to know which data are most relevant for a range of ESG topics.

To address these gaps, the World Bank has developed a Sovereign ESG Data Portal, now publicly available at http://esgdata.worldbank.org. The ESG Data Portal is the result of collaboration between the World Bank’s Finance, Competitiveness, and Innovation (FCI) global practice, the World Bank Treasury, and the Development Data Group. The project is funded by the Financial Sector Reform and Strengthening Initiative (FIRST) and the Global Program on Sustainability (GPS). The project also reflects input from colleagues throughout the World Bank, institutional investors, sovereign issuers, and other external stakeholders.

The initial version of the Sovereign ESG Data Portal addresses several objectives:

Improve availability, use, and transparency of data. The platform provides a framework of ESG indicators, drawn from multiple sources and World Bank programs, as a single downloadable file. The database is available on the Sovereign ESG Data Portal, in the World Bank’s open data catalog, and for data scientists and developers, via an application programming interface (API). The dataset also includes policy indicators that investors may have not otherwise considered in their analysis.

Provide tools to improve understanding of available data. The platform includes a set of on-site data visualization tools so users can view available data, explore trends in data, and access country-level profiles. The same Sovereign ESG dataset is available in the World Bank’s Databank platform, which provides additional tools to create and share tables, charts, and maps.

Provide context for ESG data. The World Bank’s Sovereign ESG Data Framework incorporates data relevant to all 17 Sustainable Development Goals, and organizes data into themes the World Bank views as crucial for financial sector representatives to consider when assessing the contribution of investments or policies to sustainable development. The Sovereign ESG Data Platform also provides links to other ESG-relevant data from the World Bank, such as the Human Capital and WAVES projects, along with a research library of relevant reports, blog posts, and other publications.

Better align investment with sustainable development and provide a framework for engagement. The project aims to better align investors’ ESG analysis with key sustainable development policy indicators and analysis, increase data transparency, and support private sector investments in emerging markets. Using the Sovereign ESG Data Framework as a basis, investors can better engage sovereign issuers on ESG criteria and policies to improve sustainability. The portal can promote improved understanding of risks and opportunities in World Bank client countries, which may facilitate greater private investment.

Feedback needed!

The launch of the Sovereign ESG Data Portal is the first step in what we hope will be an ongoing conversation with the investment community and the World Bank’s global practice groups. Looking ahead, we expect to add additional indicators (we are looking at geospatial and big data), improve the visualization tools, and identify ways to address data gaps. At the moment, what we really need is your feedback on what is currently on the portal. What do you like… and what could be improved? What additional ESG-relevant data are important to include? What features or additional context would be most helpful?

Contact us at esgdata@worldbank.org and let us know your ideas!