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ESG score calculation: How to find your rating (Part 2)

Sponsored: Learn about ESG ratings, their criteria, how to improve your rating and why ESG scoring may not be all it's cracked up to be.

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Teamwork with business people analyzing data on a desk in a meeting room. Image courtesy of Shutterstock.

This article is sponsored by IsoMetrix.

As covered in Part 1 of this article series, there are many methods for gauging the quality of an organization’s ESG disposition. Some firms have spent decades refining rating techniques to quantify ESG disclosures and initiatives to indicate how well a business or security may perform in the long-term due to its ability to minimize risk and capture opportunities involving environmental factors, social responsibility and good corporate governance.

Part 2 looks at some familiar names that produce the two leading technologies for real-time financial information, Bloomberg and Refinitiv, and how they have developed their own methods for scoring ESG performance. Additionally, a look at ESG ratings from CDP and EcoVadis whose intents are outside of the investment sphere altogether, and finally some debate over the credibility of ESG ratings as a whole along with guidance for how to approach ESG scoring for your organization.

New Entrants to ESG Scoring


While a longstanding monitor and compiler of ESG data and ratings, it was not until 2020 that Bloomberg analysts began to produce ESG scores using their own criteria. Scores were previously graded 0 to 100 based solely on the number of disclosures. While helpful criteria to gauge reliability of other scores such as MSCI or Sustainalytics, the Bloomberg number on its own was not very informative. 

The company’s new scoring launched with a divided approach focusing on 252 companies in the oil and gas industry for Environmental and Social (ES) scores first, due to the abundance of disclosure data and high greenhouse gas impact. Governance scores homed in on board composition for more than 4,300 companies across industries as the first component to generate Board Composition scores. Today, Bloomberg provides its Terminal users with aggregate ESG scores along with the score for each component and covers over 15,000 companies across more than 100 countries to capture nearly 88 percent of the global equity market cap. 

Contrary to many other popular ESG scorers, Bloomberg attempts to provide full transparency in its ES scores providing the links between scores and the data that influenced it. Moreover, Bloomberg ESG scores only incorporate public data directly reported from companies such as financial reports, sustainability disclosures and proxy statements. Its team of over 700 research analysts across Bloomberg Intelligence and BloombergNEF collect and analyze this data and ensure comparability.

Publicly traded companies interested in earning strong Bloomberg ESG scores will want to make sure they do a good job with self-published ESG disclosures. Bloomberg ESG scores are only available through paid Bloomberg products such as the Bloomberg Terminal. 


Launching in 2018 from the former Financial and Risk business of Thomson Reuters with strong financial backing from Blackstone, Refinitiv was aimed to compete with Bloomberg with its Eikon (previously Thomson Reuters Eikon since its release in 2010) targeted to go against the Bloomberg Terminal. Just one year later, the London Stock Exchange Group (LSEG) acquired Refinitiv and is the current owner.

With ESG scoring and analysis roots dating back prior to the Refinitiv entity itself, the firm prides itself on the vast number of companies it rates; over 12,500 worldwide (85 percent of the global market cap). Refinitiv employs expertise from over 700 ESG-trained research analysts who manually process over 630 ESG measures from publicly available data. Across the three ESG pillars, Refinitiv analysts score each firm on 10 main themes including emissions, human rights and shareholders, with materiality and breadth of company disclosures factored in as well. An ESG controversies overlay along with industry and country benchmarks are applied to scores with the final product resulting in a score from 0 to 100 with a corresponding letter grade from D to A that indicates a company’s score quartile. 

LSEG has indicated that the Refinitiv brand will change in the coming months to align more closely with the rest of the organization. Refinitiv shares ESG scores on its website including scores across the three pillars and 10 categories. More in-depth details are available within Refinitiv products.

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Non-investment ratings


Not all ESG scores and ratings come from investment or advisory firms. CDP (formerly Carbon Disclosure Project) is one of the most recognized and commended reporting frameworks in the ESG and sustainability universe, although it only focuses on environmental factors. CDP is a not-for-profit charity focused on encouraging environmental reporting to curb the catastrophic effects of climate change. Companies will submit environmental impact data each year for the year prior and receive a score from CDP. 

CDP has three reporting categories: climate; forests; and water, upon each of which a company will be graded A to F. A source within CDP has indicated that the three categories will be consolidated into a single climate category in 2024, and CDP will look to provide additional new guidance that aligns with the new TNFD reporting framework.

Any organization that does not report will be graded an F, whilst those that provide an incomplete or surface-level report will likely score a D or D-minus. Submitted reports comprehensively indicating awareness of environmental impacts but which do not provide evidence of managing them will see a C or C-minus score, while those that show a moderate level of environmental impact management will likely be in the B or B-minus range. Companies displaying leadership in making positive impacts to the environment earn an A grade. CDP also began grading cities in 2018 using similar criteria.

Companies can only be graded by CDP if they submit the required disclosures in the proper framework and any firm that submits their CDP report by the annual scoring deadline will receive their score. CDP shares its lists of companies and cities with A grades freely online; access to the full library of company ratings requires a subscription


Taking on sustainability and ethics in supply chain management, EcoVadis provides services and technology to help companies manage and rate their partners. Because supplier score cards are common practice and EcoVadis came to market in the sustainable supply chain niche early, creating a more universal supplier score related to ESG performance was a natural progression. Today, many companies incorporate EcoVadis scores in their procurement and supply chain management practices to help evaluate partners.

EcoVadis Sustainability Ratings follow a methodology that covers seven management indicators, across 21 sustainability criteria, in four themes. The themes are Environment, Labor & Human Rights, Ethics, and Sustainable Procurement. Each receives a 0-100 score that will influence the overall score. This rating methodology and assessment model is derived from GRI, UN Global Compact and ISO 26000. Additionally, EcoVadis awards top-rated companies with platinum, gold, silver and bronze medals each year for scoring in the top one, five, 25 or 50 percentiles respectively. 

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Sustainability criteria. Image courtesy of Isometrix.

To get an EcoVadis score, a company will need to become an EcoVadis customer. This is useful for when you want to assess your supply chain using the EcoVadis methodology or have a customer requiring you to get an EcoVadis rating. An EcoVadis score is valid for 12 months after publication and must be renewed and assessed annually to be able to continue sharing the rating publicly. 

Criticisms of ESG ratings

While the intent is to standardize the ESG performance of companies, securities and funds, ESG ratings have an effect of gamifying ESG initiatives to improve a score. Better scores may grow investment and brand equity but might not improve a company’s effect on its broad stakeholder population. Many scores, too, will rely on the amount of disclosure and stated goals versus the business’s actual impact, or evaluate half of double materiality by considering the effects ESG factors have on the company while dismissing the effects the company has on ESG factors. 

Others point out that grouping environmental, social and governance factors together can generate a strong score while burying weak points in one pillar. Disclosing company diversity, charitable giving and board composition while underplaying the impact of scope 3 emissions will do little to directly help climate crises. A study by Scientific Beta and covered in the Financial Times in July found that correlations between ESG scores and carbon intensity were near zero. 

Tesla leadership famously scorned S&P in 2022 for dropping the company from its ESG 500 Index due to social and governance issues when the company claimed its outsized impact in popularizing electric vehicles and creating a network to support them had a much more positive environmental impact than companies retained on the index, specifically calling out oil companies.

A longtime criticism of ESG ratings has been that the criteria and explicit scoring methodologies have been shrouded. So much so that on June 13, the EU Commission proposed new rules for ESG ratings providers under the EU Taxonomy that demand transparency over objectives, methodology, and quality assurance processes. Fifty-nine ESG ratings providers would face the threat of fines should they not provide such disclosures and avoid conflicts of interest.

Possibly the biggest current criticism of ESG ratings, however, is that there is currently a low level of standardization for ranking methodologies amongst ratings providers, leading to a situation where ESG scores for the same company can vary widely, and making it difficult to get a truly objective view on an organization’s ESG performance. This is expected to improve as the industry matures, with actions such as the International Sustainability Standards Board’s (ISSB) mandatory corporate reporting framework initiative hoping to achieve a global ESG standards baseline in the near future. 

In a recent Wall Street Journal article, Laura Nishikawa, global head of ESG Research at MSCI, defended the abundance of ESG ratings by referencing criticisms from the 2007-2008 financial crisis that lack of diverse risk perspectives led to risk blind spots. More data, visibility and diversity in opinion will help avoid similar pitfalls in her opinion. 

In the same article, Aniket Shah, managing director and global head of research and sustainability strategy at the financial services firm Jefferies Group, shared his sentiment that the underlying data from ESG scores is very useful but managing money based on a simplified letter or score was not good practice. 

How to find your ESG rating and next steps

Despite debate around ESG ratings and their efficacy, survey data suggests that 94 percent of investors use ESG ratings products at least once a month. PwC suggests in a 2022 report that assets under management in ESG assets could reach nearly $34 trillion by 2026, meaning a lot of investment dollars are at stake for companies to be considered in ESG funds.

If you’re a publicly traded company, then you likely already have an ESG rating from the major investment and advisory firms. Use this guide to find your score from the major providers. Senior and executive leadership will benefit by keeping their fingers on the pulse of what those ESG scores are via visibility into rating consistency and evaluating their satisfaction with their ratings. 

The first step to improving an unsatisfactory score is to begin disclosure following one or more of the major ESG reporting standards such as GRI, SASB, IFRS, CDP or TCFD. From there, reporting goals and plans to achieve those goals will help ESG scores further. Just be sure to provide honest disclosure and follow through on action plans; otherwise your organization will be at risk of greenwashing accusations. 

Privately held companies get much less attention from the major ratings firms but may still have scoring criteria of which to remain cognizant from private equity or venture capital owners, if applicable. The steps to improving ESG posture are similar; start with measurement and disclosure, then create goals and follow through.

The emergence of ESG ratings and reporting frameworks has created a niche for many software and consulting firms to provide solutions designed to improve ESG and sustainability disclosures and initiative effectiveness. Many firms invest in such products and services to augment internal resources to expand their ESG impact and, in turn, improve their ratings.

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