Investors are increasingly adopting ESG, and it will continue to become embedded as a part of corporate strategies moving forward. As the market surrounding ESG expands, investors are demanding new tools to assess how companies perform from an ESG standpoint.
What is an ESG Score?
An ESG score is a measure of a company’s exposure to long-term environmental, social, and governance risks that are often overlooked during traditional financial analyses.
Why it matters
ESG Score
Where does the data come from?
securities filings
voluntary business disclosures
governmental databases
media reports
academic research
What the ESG Measures
Environmental
- Carbon emissions
- Climate change vulnerability
- Water sourcing
- Biodiversity & land use
- Toxic emissions & waste
- Packaging material & waste
- Electronic waste
Social
- Labor management
- Worker safety training
- Supply chain labor standards
- Product safety & quality
- Consumer financial protection
Governance
- Composition of the board in terms of diversity & independence
- Executive compensation
- Accounting practices
- Business ethics
- Tax transparency