Environmental, social, and governance (ESG) data
LSEG ESG Scores
Our ESG scores are designed to transparently and objectively measure a company's relative ESG performance, commitment and effectiveness across 10 main themes, based on publicly available and auditable data.
|0 to 25||First Quartile||Scores within this range indicates poor relative ESG performance and insufficient degree of transparency in reporting material ESG data publicly.|
|> 25 to 50||Second Quartile||Scores within this range indicates satisfactory relative ESG performance and moderate degree of transparency in reporting material ESG data publicly.|
|> 50 to 75||Third Quartile||Scores within this range indicates good relative ESG performance and above average degree of transparency in reporting material ESG data publicly.|
|> 75 to 100||Fourth Quartile||Score within this range indicates excellent relative ESG performance and high degree of transparency in reporting material ESG data publicly.|
2023© LSEG. All rights reserved. LSEG ESG Information is proprietary to LSEG Limited and/or its affiliates ("LSEG").
The LSEG ESG Information is for general informational and non-commercial purposes only. Reproduction, redistribution or any other form of copying or transmission of the LSEG ESG Information is prohibited without LSEG’s prior written consent.
All warranties, conditions and other terms implied by statute or common law including, without limitation, warranties or other terms as to suitability, merchantability, satisfactory quality and fitness for a particular purpose, are excluded to the maximum extent permitted by applicable laws. The LSEG ESG Information is provided "as is" and LSEG makes no express or implied warranties, representations or guarantees concerning the accuracy, completeness or currency of the information in this service or the underlying Third Party Sources (as defined below). You assume sole responsibility and entire risk as to the suitability and results obtained from your use of the LSEG ESG Information.
The LSEG ESG Information does not amount to financial, legal or other professional advice, nor does it constitute: (a) an offer to purchase shares in the funds referred to; or (b) a recommendation relating to the sale and purchase of instruments; or (c) a recommendation to take any particular legal, compliance and/or risk management decision. Investors should remember that past performance is not a guarantee of future results.
The LSEG ESG Information will not be used to construct or calculate and index or a benchmark, used to create any derivative works or used for commercial purposes. LSEG’s disclaimer in respect of Benchmark Regulations applies to the LSEG ESG Information.
No responsibility or liability is accepted by LSEG its affiliates, officers, employees or agents (whether for negligence or otherwise) in respect of the LSEG ESG Information, or for any inaccuracies, omissions, mistakes, delays or errors in the computation and compilation of the LSEG ESG Information (and LSEG shall not be obliged to advise any person of any error therein). For the avoidance of doubt, in no event will LSEG have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) relating to any use of the LSEG ESG Information.
You agree to indemnify, defend and hold harmless LSEG from and against any claims, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable legal and experts' fees and costs, as incurred, arising in any manner out of your use of, or inability to use, any Information contained on the LSEG web site or obtained via any AI powered voice assistance software.
LSEG ESG scores are derived from third party publicly available sources (“Third Party Sources”) and are formulated on the basis of LSEG own transparent and objectively applied methodology. LSEG’s ESG Information methodology can be accessed here.
Showcase your firm's ESG data
Our ESG Contributor Tool helps you verify and provide timely updates on your ESG initiatives to investors and other stakeholders. The tool helps you showcase a deep range of environmental, social and governance data from your firm. We pride ourselves in our auditable ESG data, investors can trust the data we provide due to the 'click to source' capabilities within Eikon. The tool allows you to:
- Ensure the financial community has access to the timeliest ESG data on your company
- Contribute your company ESG data for the latest fiscal year
- Review and edit the historical ESG data that is already available for your company
- Communicate more effectively with your stakeholders.
A closer look at the framework
ESG scores from LSEG are designed to transparently and objectively measure a company's relative ESG performance, commitment and effectiveness across 10 main themes (emissions, environmental product innovation, human rights, shareholders, etc.) based on publicly-reported data.
LSEG ESG scores reflect the underlying ESG data framework and are a transparent, data-driven assessment of companies’ relative ESG performance and capacity, integrating and accounting for industry materiality and company size biases.
The LSEG ESG score measures the company’s ESG performance based on verifiable reported data in the public domain. It captures and calculates over 630 company-level ESG measures, of which a subset of 186 of the most comparable and material per industry power the overall company assessment and scoring process.
The underlying measures are based on considerations around comparability, impact, data availability and industry relevance that varies across each industry group.
These are grouped into 10 categories that form the three pillar scores and the final ESG score, which is a reflection of the company’s ESG performance, commitment and effectiveness based on publicly reported information.
The category scores are rolled up into three pillar scores – environmental, social and corporate governance. ESG pillar score is a relative sum of the category weights which vary per industry for the 'Environmental' and 'Social' categories. For 'Governance', the weights remain the same across all industries.
We have adopted a percentile rank scoring methodology to calculate the 10 category scores – being based on rank, these are not sensitive to outliers.
This methodology considers three key factors:
- How many companies are worse than the current one?
- How many companies have the same value?
- How many companies have a value at all?
To calculate the environmental and social category scores the LSEG Business Classification industry group is used as the benchmark, as these topics are more relevant and material to companies within the same industries.
To calculate the governance categories, country of incorporation is used as the benchmark, as best governance practices are more consistent within countries.
To apply an objective, impartial and trusted assessment of the importance of each ESG theme to different industries, the LSEG ESG magnitude matrix was developed as a proprietary model and is applied at the category level. Importantly, the magnitude values are automatically and dynamically adjusted as ESG corporate disclosure evolves and matures.
Details about the LSEG ESG materiality matrix can be found in the full ESG Scores methodology document.
Collecting ESG data
Largest ESG content collection operations in the world
With over 700 content research analysts trained to collect ESG data, we have one of the largest ESG content collection operations in the world. With local language expertise and operating from different locations across the globe, we process numerous publicly available information sources with the aim of providing up-to-date, objective and comprehensive coverage. There are over 630 ESG measures, which our analysts process manually for each company within the ESG universe, with each measure undergoing a careful process to standardise the information and guarantee it is comparable across the entire range of companies.
The database is updated on a continuous basis – aligned with corporate reporting patterns – and data is refreshed on products every week, including the recalculation of the ESG Scores. Updates could include a brand-new company being added to the database, the latest fiscal year update or the inclusion of new controversy events. In most cases, reported ESG data is updated once a year in line with companies’ own ESG disclosure. We refresh data more frequently in exceptional cases, usually when there is a significant change in the reporting or corporate structure during the year. ESG news and controversies are updated on a continuous basis, as and when such events occur and get picked up by global media.
Data quality is a key part of the collection process; that is why we use a combination of both algorithmic and human processes to make sure we achieve as close to 100% data quality as possible. Below is an overview of the various methods we use to achieve this goal.
1. Data entry/pre-product
- Around 400 built-in error check logics in the collection tool for various data points
- Error checks can be tailor-made for specific requirements
- Around 300 automated quality check screeners tun on ESG collection tool:
- Relating to interrelated data points
- Negative screening
- Inconsistency or missing in quants and qualitative
- Variance within a year
- Raw data and comments section
- Sector-based checks (TRBC codes)
- Validating completeness of the prior year
3. Independent audits
Sample audits on a daily basis:
- Detailed audits
- Critical data point checks
- Product audits
Weekly reporting and root cause analysis:
- Feedback sessions with the production teams
4. Management reviews
- Monthly quality-deep dives
- Heatmap analysis with top areas for concerns
- Measures to address problematic topics and data points
- New system validation checks and screeners are constantly created based on new learning, insights and feedback to continuously improve the data quality.
Continuously expanding coverage
ESG data is maintained and ESG scores are calculated for more than 15,000 companies around the world.
Our coverage has evolved over time and is continuously expanding as we include more indices. We review the constituents of these indices on a quarterly basis, when additional companies are also included.
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