ESG Analytics has just announced the launch of a new exciting metric called the ESG Beta - a novel measure that uses the flagship ESG Pulse, regressed on a company's stock price, to determine the correlation between external ESG sentiment and company stock prices. This new metric is set to change the game in ESG investing.
Why is this needed?
In recent years, there has been an explosion of ESG data, and many have attempted to answer the question of whether ESG drives alpha. However, what ESG Analytics has found is that each company has a unique relationship with ESG, and the ESG Beta measure allows investors to better understand which companies are impacted by external events and how their stock prices may be affected.
With the ESG Beta score, investors will be able to identify companies that are more sensitive to ESG factors and make better-informed decisions about their investments. The measure provides a more accurate picture of a company's exposure to ESG risks and opportunities, which will be especially valuable to investors who are looking to incorporate ESG considerations into their investment strategy.
Overall, the ESG Beta is a groundbreaking measure that has the potential to revolutionize ESG investing. It provides investors with a more nuanced understanding of the relationship between ESG factors and stock prices, which will help them make better-informed investment decisions. ESG Analytics is excited to bring this innovative new metric to market and looks forward to seeing how it will be used by investors around the world.
What does the ESG Beta look like?
If you took an example of Colgate Palm-Olive they have an ESG Beta of -0.38 which means they are having a negative correlation with the ESG Pulse - signifying that they are less likely to be impacted by ESG Events. They also have an ESG Pulse of 0.50 which is reasonably high. The ESG Beta varies on a day to day basis, but the point in time score is its 10 day rolling correlation. This negative correlation has also coincided with a smoother ESG Pulse and an increase in stock price over the past few months.
This metric will be expanded in the future to show longer and shorter time comparisons for easier analysis.
Visit the ESG Analytics web platform to learn more
ESG Analytics has just announced the launch of a new exciting metric called the ESG Beta - a novel measure that uses the flagship ESG Pulse, regressed on a company's stock price, to determine the correlation between external ESG sentiment and company stock prices. This new metric is set to change the game in ESG investing.
Why is this needed?
In recent years, there has been an explosion of ESG data, and many have attempted to answer the question of whether ESG drives alpha. However, what ESG Analytics has found is that each company has a unique relationship with ESG, and the ESG Beta measure allows investors to better understand which companies are impacted by external events and how their stock prices may be affected.
With the ESG Beta score, investors will be able to identify companies that are more sensitive to ESG factors and make better-informed decisions about their investments. The measure provides a more accurate picture of a company's exposure to ESG risks and opportunities, which will be especially valuable to investors who are looking to incorporate ESG considerations into their investment strategy.
Overall, the ESG Beta is a groundbreaking measure that has the potential to revolutionize ESG investing. It provides investors with a more nuanced understanding of the relationship between ESG factors and stock prices, which will help them make better-informed investment decisions. ESG Analytics is excited to bring this innovative new metric to market and looks forward to seeing how it will be used by investors around the world.
What does the ESG Beta look like?
If you took an example of Colgate Palm-Olive they have an ESG Beta of -0.38 which means they are having a negative correlation with the ESG Pulse - signifying that they are less likely to be impacted by ESG Events. They also have an ESG Pulse of 0.50 which is reasonably high. The ESG Beta varies on a day to day basis, but the point in time score is its 10 day rolling correlation. This negative correlation has also coincided with a smoother ESG Pulse and an increase in stock price over the past few months.
This metric will be expanded in the future to show longer and shorter time comparisons for easier analysis.
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Why is ESG data expensive?
The costs of collecting, analyzing and storing data are not cheap. And unlike financial data, there is no standardized process for determining ESG scores.The complexity of ESG data and the lack of standardization in the process for assessing environmental, social and governance factors also makes it difficult to compare companies on these metrics. Regulators are trying to make ESG information more transparent by mandating that companies disclose them alongside their financials, but this is still materializing globally. Traditional providers such as MSCI or Refinitiv employ armies of analysts to get this data from corporate disclosures (if it exists) and then normalize that data and provide it back to you. This is a very expenive process, with lots of quality control, and importantly - because this data is not disclosed very frequently (companies typically disclose ESG related data annually), there is less incentive to have a continuous subscription to a ESG data feed, along with risk of information leakage. All of this results in very expensive, and limited annual contracts.
The costs of collecting ation in the process for assessing environmental, social and governance factors also makes it difficult to compare companies on these metrics. Regulators are trying to make ESG information more transparen
The costs of collecting
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The costs of collecting
The costs of collecting
The costs of collecting
The costs of collecting ation in the process for assessing environmental, social and governance factors also makes it difficult to compare companies on these metrics. Regulators are trying to make ESG information more transparen
The costs of collecting
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