Reliable ESG data is no longer just a regulatory requirement. From an investor perspective, it has become a signal of management quality, strategic maturity and long-term value creation.
To explore how investors actually use ESG data in decision-making, and what they expect from companies beyond compliance, we spoke with Brendan Moroso, Senior Manager Climate at Morningstar. In his role, Brendan advises large multinational companies on decarbonisation strategies, sustainability reporting and how to align climate performance with investor expectations.
His message to corporate leaders is clear. ESG data matters not because regulators ask for it, but because investors rely on it to assess risk, resilience and long-term shareholder value.
“For years, investors listened to ambition and targets. Now the conversation has moved on. What we want to see is evidence of progress and implementation.”
From ambition to evidence: how investor demand has evolved
Over the past decade, investors have seen a wave of ESG commitments, targets and vision statements. Net zero by 2050 became almost a default promise. According to Brendan, that phase is now coming to an end.
“We are moving away from high-level promises towards very specific operational data. Investors want to understand what is actually happening on the ground.”
Instead of broad narratives, investors increasingly ask for:
- Capital expenditure aligned with transition plans
- Plant-level or asset-level emissions data
- Breakdowns by geography and product line
Financial numbers matter more than soft language. And while expectations differ by sector and region, the overall direction is consistent.
“European companies are generally further along, partly because regulation forces rigour. But the expectations we see there are quickly becoming global.”
What makes ESG data reliable in the eyes of investors
From an investor perspective, reliability starts with consistency, completeness and comparability. Alignment with recognised standards, particularly the Greenhouse Gas Protocol, is a baseline expectation. Investors expect full disclosure across Scope 1, 2 and 3 emissions, without arbitrary exclusions or partial coverage.
“Partial reporting is one of the fastest ways to lose credibility. If only a quarter of your emissions are covered, investors immediately question what they are not seeing.”
Granularity also matters. High-level summaries may support storytelling, but they are not decision-useful.
“Investors do not invest based on narratives. They invest based on numbers they can trust, compare and track over time.”
Poor data quality does not always lead to immediate valuation impacts, but it does affect investor confidence and engagement.
“Even if it does not show up directly in the share price, weak ESG data absolutely changes the tone of investor conversations.”
Beyond compliance: ESG data as a value driver
Treating ESG reporting primarily as a compliance exercise comes with hidden risks.
Institutional investors such as pension funds and insurers operate on time horizons of ten to forty years. They use ESG data to understand how a company will perform under future regulatory, market and customer conditions.
“Companies understand the next two or three years very well. Investors help them think about what the world might look like in ten years, and ESG data is a key input in that discussion.”
In many sectors, ESG data is also becoming commercially relevant. In B2B markets, disclosure requirements increasingly appear in RFPs and supplier assessments.
“For a lot of companies, ESG reporting starts because customers ask for it, not because consumers do.”
Used strategically, ESG data strengthens the equity story and supports long-term value creation.
What good looks like inside a mature organisation
Investors do not only look at the data itself. They look for signals that ESG data is embedded in how the company is run. Integration is one of the clearest indicators. When ESG data sits in a silo, separate from finance and operations, it signals immaturity.
“When ESG data is integrated with financial data, it tells investors that sustainability is part of how decisions are actually made.”
Governance is another strong signal. Senior leadership involvement matters.
“If a CEO cannot speak confidently about their emissions, it raises the same concerns as not knowing the company’s revenue.”
Technology plays a critical role here. Robust systems improve consistency, auditability and scalability, and allow ESG data to be used for decision-making rather than disclosure alone.
“Data sophistication is increasingly seen as a proxy for management quality.”
Practical advice for executives under pressure
For CFOs and sustainability leaders feeling overwhelmed by ESG reporting demands, Brendan’s advice is to focus on what is material and decision-useful.
Start with the ESG data that matters most to investors in your sector, particularly in high-emitting industries. Ensure it is complete, standardised and connected to business activity.
Avoid treating ESG as a side project. Involve finance, procurement and operations early to improve data quality and relevance.
“The companies that do this well are not just more compliant. They are more credible, more competitive and better prepared for what comes next.”
One message for corporate leaders
Brendan’s final message to corporate leaders is straightforward: “Material, numerical awareness of ESG performance is no longer optional. It underpins short-term competitiveness and long-term investor relevance.”
Companies that integrate ESG data into decision-making demonstrate stronger governance, higher management quality and a clearer path to sustainable shareholder value.
Turning investor expectations into operational reality
The investor perspective shared by Brendan Moroso reinforces a simple truth: reliable ESG data is not created at the point of disclosure. It is built through strong processes, clear ownership and systems that connect sustainability data with financial and operational decision-making.
This is where many organisations still struggle, as ESG data is often spread across functions, collected manually and reconciled late in the reporting cycle. As expectations rise from investors, regulators and customers, these limitations become increasingly visible.
At Salacia Solutions, we help companies move beyond fragmented ESG reporting. Our platform enables organisations to:
- Capture ESG data consistently across the business
- Align sustainability metrics with financial and operational data
- Strengthen governance, audit readiness and investor confidence
- Use ESG insights to support strategy, not just compliance
By creating a single, reliable source of ESG truth, companies are better equipped to meet investor expectations today and adapt to what comes next.
Ready to move beyond compliance?
If you want to understand how investor-grade ESG data can support long-term value creation in your organisation, we would be happy to explore this with you.
Discover how Salacia helps companies build reliable, decision-ready ESG data. Talk to our team
Disclaimer: “The views shared are the personal opinions of the interviewee and do not represent those of their employer or any of its subsidiaries.”
