What is the ESG Pulse
The ESG Pulse is a powerful tool that ESG Analytics has developed to assess ESG risk in companies. It is our flagship measure and is considered to be one of the most comprehensive and reliable ways to evaluate a company's ESG performance.
What makes the ESG Pulse unique is that it looks at data sources outside of company disclosure. This provides an outside-in view of a company's ESG performance, which is crucial to understanding the impact a company has on the environment, society, and governance. Additionally, the ESG Pulse uses artificial intelligence that reads more than 500 million documents on companies globally. This allows the ESG Pulse to provide a comprehensive understanding of a company's ESG risk.
Overall, the ESG Pulse is an effective tool for evaluating a company's ESG performance. It provides a unique perspective and uses advanced technology to ensure that its analysis is thorough and accurate. By using the ESG Pulse, investors and companies alike can gain valuable insights into the ESG risk of a company, which can help inform decision-making and drive positive change.
How is the ESG Pulse scored?
The ESG Pulse is scored on a scale ranging from -1 to +1. The score is determined by analyzing a variety of factors that contribute to a company's ESG risk. These factors include a company's environmental impact, social practices, and governance policies. For each factor, the ESG Pulse assesses the company's performance and assigns a score. Companies that perform well in a particular area receive a positive score, while those that perform poorly receive a negative score.
It is important to note that the ESG Pulse score is not an absolute measure of a company's ESG performance. Rather, it is a relative measure that compares a company's ESG risk to that of its peers. A score of 0 indicates that a company's ESG risk is in line with that of its peers, while a score below 0 indicates that a company's ESG risk is higher than that of its peers. Conversely, a score above 0 indicates that a company's ESG risk is lower than that of its peers. Companies with negative ESG Pulse scores are often considered to be risky investments, but it is important to consider the score in relation to the company's peers and industry before making any investment decisions.
How do I use the ESG Pulse for understanding ESG Risk?
The overall ESG Pulse score can be used as a snapshot metric to quickly assess a company's ESG risk. By looking at the overall score, investors and companies can gain an understanding of the company's ESG performance relative to its peers. A high overall ESG Pulse score indicates that a company has a relatively low ESG risk, while a low score indicates a relatively high ESG risk. This snapshot view can be useful for quickly identifying companies that may require further analysis and due diligence.
In addition to the overall ESG Pulse score, investors and companies can also look at historical charts to see how the daily pulse score changes over time. This can provide insight into how a company's ESG risk is trending and whether it is improving or worsening over time. By analyzing these trends, investors and companies can identify potential risks and opportunities and make more informed investment decisions.
The historical chart and time series also includes a 30-day moving average, which is a smoothed series that is better for assessing long-term performance. This is because news cycles and media events can cause short-term fluctuations in the ESG Pulse score, but the 30-day moving average can help to smooth out these fluctuations and provide a more accurate picture of a company's ESG risk over time. By looking at the 30-day moving average, investors and companies can gain a better understanding of a company's long-term ESG performance and identify any potential areas for improvement.
Can this be broken down ?
Yes, the ESG Pulse score can be broken down into three sub-scores: environmental, social, and governance. Each sub-score focuses on a different aspect of a company's ESG risk. The environmental sub-score assesses a company's impact on the environment, including its carbon footprint and use of natural resources. The social sub-score assesses a company's impact on society, including its labor practices and community engagement. The governance sub-score assesses a company's governance policies, including its board structure and executive compensation. By analyzing these sub-scores, investors and companies can gain a more detailed understanding of a company's ESG risk and identify specific areas for improvement.
Yes, the ESG Pulse score can also be broken down into the 26 Sustainability Accounting Standards Board (SASB) categories, which are the industry standard for ESG disclosure. These categories cover a wide range of topics, including labor practices, greenhouse gas emissions, and product safety. By analyzing the ESG Pulse score across these categories, investors and companies can gain a comprehensive understanding of a company's ESG risk and identify specific areas for improvement.
Get access to the ESG Pulse at www.esganalytics.io/contact