Strategies for Managing Score Differences
This article examines the consistency of ESG (Environmental, Social and Governance) data sets from four different ESG data vendors. We find that E scores are consistent across vendors, but suffer from ambiguity defining “better” scores. S scores are somewhat less consistent and seem to overweight good contributions to society and company employees, at the expense of penalizing sin stocks. Both E and S scores continue to exhibit reasonably strong consistency even after industry adjustment. We find that G scores show poor intervendor consistency, regardless of whether or not they have been industry-adjusted
