A0880
Title: Evaluating the impact of methodological choices on ESG scores
Authors: Matteo Benuzzi - University of Trento (Italy)
Ozge Sahin - Delft University of Technology (Netherlands)
Sandra Paterlini - University of Trento (Italy) [presenting]
Abstract: Environmental, social, and governance (ESG) providers aggregate various types of information, particularly key performance indicators (KPIs), to generate comprehensive scores. This aggregation process typically involves numerous binary and continuous variables, often plagued by significant amounts of missing data. The aggregation methodologies employed by these providers can significantly influence the dependence structures within the data. Using data from Refinitiv, a leading ESG provider, insights are provided into the impact of aggregation methodology on the dependence structure between raw and normalized KPIs in the presence of missing data, as well as on the number of KPIs needed to construct representative ESG scores.
