[TEJ Finance Research Institute] Comparison of Different ESG Ratings

MSCI / S&P Global / Refinitiv


ESG concepts and actions are developing in full swing around the world. Many well-known large financial services companies in the world are also actively committed to developing their own ESG measurements, such as Morgan Stanley Capital International, Standard & Poor’s Global, Refinitiv, and other companies. Each rating company features different methodologies based on data sources, industry classifications, and score calculations. This article will take MSCI, S&P Global, and Refinitiv, the three major global financial services companies as examples, to describe their data sources, industry classification criteria, score calculation methods, and the key points of the three companies’ ratings.

✨MSCI ESG Ratings

📍Data Characteristic

MSCI ESG Ratings focus on analyzing each ESG risk and opportunity of the rated company and use the concepts of “Exposure” and “Management” to evaluate each ESG risk and opportunity.

📍Data Source

MSCI ESG Ratings use data provided by more than 100 government and non-governmental organizations, 10-K reports and sustainability reports disclosed by the rated companies, and more than 3,000 media sources which are updated daily. It is worth noting that the MSCI ESG ratings do not use data collected through questionnaires.

📍Classification Standard

Referring to the Sub-Industry of the Global Industry Classification Standard (GICS), MSCI ESG Ratings classify all rated companies into 11 Sectors and 158 Sub-Industries. Except for Governance, each important issue of Environment and Social in the MSCI ESG Ratings will be given different weights according to the industry. The weight depends on two factors. First, the greater the relevance of the rated industry to the issue, the greater the weight will be given. Second, the closer the timing of the rated industry is influenced by important issues compared with other industries, the higher the weight.

📍Score Calculations

MSCI Ratings begin with evaluating “Exposure” and “Management” scores for each issue. Then through calculating the weighted average, the score of each dimension of E, S, and G and the overall ESG score are calculated. Finally, the ESG scores are adjusted according to the industry and converted into ratings, as shown in the following table:

Graph 1. Conversion of Industry Adjusted Scores and Letter Rating

S&P Global ESG Ratings

📍Data Characteristic

S&P Global ESG rating methodology is featured by its data source, industry classifications, and score calculations, which are derived from CSA (Corporate Sustainability Assessment). In addition, S&P Global ESG Ratings also include growth potential and profitability of the rated industry as the key points in determining the weight.

📍Data Source

S&P Global ESG Ratings is divided into two sources of data based on whether the rated company actively participates in the CSA questionnaire. If the rated company actively participates in the CSA questionnaire, S&P Global ESG Ratings will include both the result of the questionnaire and the public information of the rated company when calculating the ESG score. If the rated company does not actively participate in the CSA questionnaire, only the public information of the rated company will be used when calculating the ESG score.

📍Classification Standard

S&P Global ESG Ratings adopt GICS as the structure, and 61 industry categories are derived from the structure. Each industry will have exclusive CSA questionnaire questions to avoid specific questions not applicable to the rated company which results in the deduction of scores due to insufficient information. In addition to setting different standards based on different industries, each factor’s impact on the future prospect of the rated industry is also considered.

📍Score Calculations

Using the following three points, each data point is given a score of 0 to 100 points: implementation level, the degree of disclosure, whether there are additional efforts that are not currently required by the regulations. Then through calculating the weighted average, the questionnaire score, factor score, dimension score, and finally ESG score is calculated in sequence. It is worth noting that S&P Global ESG Ratings do not have industry-adjusted scores and letter ratings. Taking Taiwan’s cross-industry sample as an example, by dividing 0 to 100 points into 7 groups at equal intervals, it can be found that there is a right-skewed distribution as shown in the following figure:

Graph 2. Distribution of S&P Global Ratings of Taiwanese Companies in 2020 (n=389), y- axis unit: %

Refinitiv ESG Company Scores

📍Data Characteristic

Refinitiv ESG Scores adopt ranking to calculate percentile scores and focus on the relative performance of companies in the industry, which can reduce the sensitivity of the outlier effect on the percentile scores. In addition, the ESG controversies score is included in the total score calculation, and the controversies score is given a corresponding weight according to the market value of the evaluated company to adjust to the difference in company size.

📍Data Source

Sources of Refinitiv ESG Scores include the company’s official website, annual report, NGO websites, and media news. Like MSCI, no questionnaire data is used.

📍Classification Standard

The industry classification of Refinitiv ESG divides industries into 54 categories and is based on The Refinitiv Business Classifications (TRBC). In addition, it also stipulates the appropriate weight for each category in the corresponding industry of Environmental and Social, while categories in Governance are not affected by the industry.

📍Score Calculations

Refinitiv ESG Scores use the ranking of a subset of data points to calculate the percentile score. And then, the percentile scores are added up and further converted into percentile again to obtain a score for each category. Then through calculating the weighted average, the score of each dimension of E, S, and G and the overall ESG score is calculated.

The difference from the other two ratings is that after Refinitiv ESG Scores calculate the ESG score, it will calculate an ESG controversies score, and then use the ESG score and the controversies score to derive the ESGC score (C means Controversy).

Summary of International ESG Ratings


ESG has become a prevailing topic today. This article compares the ESG ratings of three financial rating agencies to understand the similarities and differences between them. One of the similarities is that when calculating the scores, the corresponding weights must be applied, and the way of stipulating the weights will consider industry relevance or impact. This indicates that the weights are an indispensable element for calculating the total score.

TEJ develops the TESG Rating which combines the best features of international ESG ratings and specific elements for Taiwanese companies. The industry classification used in the TESG Rating also aims at sustainable development and restructures industry classification with a total of 11 categories. Through TEJ’s large amount of ESG data plus quantitative analysis techniques, TESG Rating covers all public companies in Taiwan and is exclusive to the Taiwan market!

TESG Rating developed by TEJ helps tackle these current difficulties in promoting responsible investment and responsible lending, and it also features:

High Coverage: including Taiwan listed, OTC, and public offering companies

Theory-based: adopting quantitative analysis technology and with reference to international ESG standards and industry nature of Taiwan.

Complete Database — even if there is no CSR report disclosure, a company can be rated

With the above features, you will save tremendous time and effort evaluating ESG with the help of TESG! Want to know more? Please do not hesitate to send your inquiries or ideas by phone or by email to us.

☎️: 02–87681088
✉️: tej@tej.com.tw

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TEJ 台灣經濟新報

TEJ 台灣經濟新報

TEJ 為台灣本土第一大財金資訊公司,成立於 1990 年,專門提供金融市場基本分析所需資訊,以及信用風險、法遵科技、資產評價、量化分析及 ESG 等解決方案及顧問服務。鑒於財務金融領域日趨多元與複雜,TEJ 結合實務與學術界的精英人才,致力於開發機器學習ML、人工智慧AI及自然語言處理NLP等新技術,持續提供創新服務