A challenge to ESG integration for investment managers is the:

One of the biggest challenges in ESG integration is the subjective nature of ESG analysis due to varying methodologies, inconsistent reporting, and differing interpretations of materiality.

ESG factors are qualitative and require judgment to assess their financial impact.

Different ESG rating agencies (e.g., MSCI, Sustainalytics, Refinitiv) use different scoring models, leading to low correlation among ESG scores (not high correlation).

There is no single standardized ESG dataset, making it difficult for managers to compare companies objectively.