ESG Score Predictor: Applying a Quantitative Approach for Expanding Company Coverage
Assessing Environmental, Social, Governance (ESG) and climate risk is often subject to data constraints, including limited company coverage. This paper provides an overview of Moody's ESG Score Predictor, an analytical framework that can expand coverage gaps by generating a wide array of ESG and climate risk metrics.
Assessing Environmental, Social, Governance (ESG) and climate risk is often subject to data constraints, including limited company coverage. This paper provides an overview of Moody's ESG Score Predictor, an analytical framework that can expand coverage gaps by generating a wide array of ESG and climate risk metrics.
Our comparable and standardized predicted metrics include large-, mid-, and small-cap firms, spanning a wide variety of industries across both developed and emerging markets. We demonstrate our approach's effectiveness using two illustrative portfolios compromised of a large number of firms.
The resulting portfolio profiling and vulnerability analysis allow us to achieve full coverage and to generate heatmaps identifying company performance disparities across sectors, industries, and regions.
