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Santa Clara UniversityUniversity Library

Sustainable Business

Example ESG Metrics

Environmental

  • Carbon footprint
  • GHG emissions
  • YoY energy, water, waste variance
  • Regulatory requirements (reactive/proactive)
  • Materials sourcing
  • Product innovation

Social

  • Stakeholder engagement
  • Social impact/wellbeing
  • Resilience/preparedness
  • Diversity, equity, and inclusion/opportunity
  • Workplace health and safety

Governance 

  • Cybersecurity 
  • Employee benefits
  • Executive compensation makeup
  • Pay gap
  • Board function/structure
  • Vision and strategy

Best Bets for Environmental, Social and Governance (ESG) Ratings

Read the current 490-page proposal here: The Enhancement and Standardization of Climate-Related Disclosures for Investors.

Important: ESG reporting is still in its infancy. There are currently over 100 sustainability-related ratings, rankings and awards. Each of these has its origin in a different set of circumstances and each ranking owner has their own agenda. Specifically measuring ESG performance is challenging, attention to the underlying data is essential, and ESG ratings and metrics should be carefully considered for each application/industry.

Consider this: ESG raters are paid by the investors who use the ratings, not by the companies that are rated. "Rating agencies also show a clear bias favoring developed markets outside of the US."

Five of the prominent ESG rating agencies include: Sustainalytics, Moody's ESG (Vigeo-Eiris), S&P Global (RobecoSAM), Refinitiv (Asset4), and MSCI (KLD). For a helpful comparison of ESG across business database solutions, visit Edward Lim's comparison chart. For more on the ABC's of ESG Frameworks visit the ESG navigator or investigate the standards tab in this guide.