The majority (72%) of Asia-Pacific (APAC) institutional investors are implementing an environment, social and governance (ESG) framework into their investment process. However, the lack of transparent, standardized, quality data remains a significant barrier to the adoption of ESG strategies, according to a recent survey conducted by State Street Corporation.

The study found that many of the traditional barriers to ESG integration are receding. 60% of surveyed institutional investors in APAC (67% globally) believe it’s possible to align material ESG issues and financial performance; 58% (65% globally) also do not believe ESG equals lower returns. Just 8% of APAC survey respondents (10% globally) say they view fiduciary duty as a barrier to ESG integration. 71% of APAC survey respondents (74% globally) see three-plus years as a realistic timeframe to gain outperformance from ESG investments

However, the study also reflected a clear outcry for transparent, standardized and quality ESG data.

“The promise of ESG integration starts with data,” say Lou Maiuri, executive vice president and head of State Street Global Exchange and Global Markets businesses. “It is grounded in data transparency, engagement and the goal of creating a future intelligent approach to investing. Having a custodian for data has become just as critical as having a custodian for financial assets when trying to deliver long-term value creation for all investors and the society as a whole.”

A large majority (87% in APAC and 92% globally) of institutional investors surveyed want companies to explicitly identify ESG factors that materially affect performance, while 58% in APAC (60% globally) note a lack of industry standards for measuring ESG performance as a significant barrier to full integration. Half of the surveyed APAC retail investors (46% globally) want to see more companies reporting ESG performance related data and 56% in APAC (46% globally) say they need more ESG data from other sources to make educated decisions.