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Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems
This white paper explores the construction of a reliable Environmental, Social, and Governance (ESG) scoring engine, with a focus on the importance of data sources and quality, selection of ESG indicators, weighting and aggregation methodologies, and the necessary validation and benchmarking procedu...
Autores principales: | , , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
F1000 Research Limited
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10568210/ https://www.ncbi.nlm.nih.gov/pubmed/37840702 http://dx.doi.org/10.12688/openreseurope.16278.1 |
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author | Liu, Yiting Osterrieder, Joerg Hadji Misheva, Branka Koenigstein, Nicole Baals, Lennart |
author_facet | Liu, Yiting Osterrieder, Joerg Hadji Misheva, Branka Koenigstein, Nicole Baals, Lennart |
author_sort | Liu, Yiting |
collection | PubMed |
description | This white paper explores the construction of a reliable Environmental, Social, and Governance (ESG) scoring engine, with a focus on the importance of data sources and quality, selection of ESG indicators, weighting and aggregation methodologies, and the necessary validation and benchmarking procedures. The current challenges in ESG scoring and the importance of a robust ESG scoring system are addressed, citing its increasing relevance to stakeholders. Furthermore, different data types, namely self-reported data, third-party data, and alternative data, are critically evaluated for their respective merits and limitations. The paper further elucidates the complexities and implications involved in the choice of ESG indicators, illustrating the trade-offs between standardized and customized approaches. Various weighting methodologies including equal weighting, factor weighting, and multi-criteria decision analysis are dissected. The paper culminates in outlining processes for validating the ESG scoring engine, emphasizing the correlation with financial performance, and conducting robustness and sensitivity analyses. Practical examples through case studies exemplify the implementation of the discussed techniques. The white paper aims to provide insights and guidelines for practitioners, academics, and policy makers in designing and implementing robust ESG scoring systems. |
format | Online Article Text |
id | pubmed-10568210 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | F1000 Research Limited |
record_format | MEDLINE/PubMed |
spelling | pubmed-105682102023-10-13 Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems Liu, Yiting Osterrieder, Joerg Hadji Misheva, Branka Koenigstein, Nicole Baals, Lennart Open Res Eur Research Article This white paper explores the construction of a reliable Environmental, Social, and Governance (ESG) scoring engine, with a focus on the importance of data sources and quality, selection of ESG indicators, weighting and aggregation methodologies, and the necessary validation and benchmarking procedures. The current challenges in ESG scoring and the importance of a robust ESG scoring system are addressed, citing its increasing relevance to stakeholders. Furthermore, different data types, namely self-reported data, third-party data, and alternative data, are critically evaluated for their respective merits and limitations. The paper further elucidates the complexities and implications involved in the choice of ESG indicators, illustrating the trade-offs between standardized and customized approaches. Various weighting methodologies including equal weighting, factor weighting, and multi-criteria decision analysis are dissected. The paper culminates in outlining processes for validating the ESG scoring engine, emphasizing the correlation with financial performance, and conducting robustness and sensitivity analyses. Practical examples through case studies exemplify the implementation of the discussed techniques. The white paper aims to provide insights and guidelines for practitioners, academics, and policy makers in designing and implementing robust ESG scoring systems. F1000 Research Limited 2023-07-26 /pmc/articles/PMC10568210/ /pubmed/37840702 http://dx.doi.org/10.12688/openreseurope.16278.1 Text en Copyright: © 2023 Liu Y et al. https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. |
spellingShingle | Research Article Liu, Yiting Osterrieder, Joerg Hadji Misheva, Branka Koenigstein, Nicole Baals, Lennart Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems |
title | Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems |
title_full | Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems |
title_fullStr | Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems |
title_full_unstemmed | Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems |
title_short | Navigating the Environmental, Social, and Governance (ESG) landscape: constructing a robust and reliable scoring engine - insights into Data Source Selection, Indicator Determination, Weighting and Aggregation Techniques, and Validation Processes for Comprehensive ESG Scoring Systems |
title_sort | navigating the environmental, social, and governance (esg) landscape: constructing a robust and reliable scoring engine - insights into data source selection, indicator determination, weighting and aggregation techniques, and validation processes for comprehensive esg scoring systems |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10568210/ https://www.ncbi.nlm.nih.gov/pubmed/37840702 http://dx.doi.org/10.12688/openreseurope.16278.1 |
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