New Delhi, Aug 15 (PTI) More than 90 per cent of Indian institutional investors now consider sustainability information essential in their due diligence process, said a study by Deloitte and The Fletcher School at Tufts University, adding as sustainability becomes more integrated into investment management, confidence in the ESG data used to inform these decisions is lacking, creating challenges in accessing reliable data.

“According to Indian investors, the inconsistency or inconsistency of ESG rating data (73 percent), cost constraints to integrate ESG data into investment decision models (71 percent), and the lack of measurable results in corporate disclosures (70 percent) reduce the trust factor in available sustainability data, inhibiting their ability to implement ESG investment strategies,” Deloitte said, referring to its study titled “Investor Trust in Sustainability Data.”

The study further shows that Indian investors are more likely to rely on internal proprietary data systems and audited (or warranted) company disclosures for sustainability analysis. However, compared to global investors, Indian investors are less likely to rely on external data sources and ratings.

Viral Thakker, Partner and Sustainability & Climate Leader, Deloitte South Asia, said, “While the focus on sustainable investment is laudable, the lack of access to reliable data remains a significant barrier for Indian investors. There is a critical need for improved reporting standards. to build investor confidence and facilitate informed decision-making.

“Organizations must strengthen sustainable governance capabilities, invest in high-quality measurement and reporting systems, and seek third-party assurance of their disclosures. By prioritizing transparency and engagement, companies can align with investor expectations and contribute to social and environmental outcomes, promoting a sustainable future for all.”

Highlighting the growing trend of sustainable investing, the report states that around 78 percent of Indian institutional investors invest up to 30 percent of their funds to finance organizations that strive to achieve specific and measurable ESG goals. About 1 percent invest more than 60 percent of their funds in organizations that meet definitive ESG goals.

About 41 percent of Indian investors cite regulatory requirements as the main driver for integrating sustainability factors into investment decisions, closely followed by the pursuit of improved social and environmental outcomes (36 percent each). This contrasts with global benchmarks, where investors prioritize financial performance and risk diversification.

The increasing awareness of climate change, social issues and corporate governance standards has led to increased pressure on investors from their clients.

Almost 40 percent of investors experience pressure, of which around 15 percent feel significant pressure to integrate ESG strategies into their investment decisions due to demands from clients and asset managers. This customer-driven demand highlights the significant influence of external expectations on incorporating ESG factors into investment strategies.

“Building and maintaining investor trust is critical for companies to remain competitive, grow market value and access capital. Trust can be built through actions that demonstrate a high level of competence and positive intent. Our study shows a significant gap in ESG data reliability, challenges investors trying to incorporate sustainability into their decisions.

“To bridge this gap and foster greater trust, organizations need to reliably meet their sustainability commitments and improve transparency through standardized reporting and robust data verification. By doing so, we can empower Indian investors to make more informed and impactful sustainability investments, which ultimately driving positive investment social and environmental change,” said Shabana Hakim, Managing Director, Deloitte India.

The survey shows that around 80 percent of Indian investors have implemented sustainability policies. Of these, 14 percent have had a policy for more than five years and 58 percent have had a policy for more than two years.