Dr ESG

  While the Total ESG scores are important, ESG scores are made up of Environmental, Social, and Governance scores.  With respect to Yahoo Finance, the Total ESG scores are a sum of its three components. As a result, the scores for ESG may be different from the Total ESG score.  This is that industries may perform better in one category and worse in another. The chart below shows the Environmental scores by industry.  What is interesting in this chart? Firstly, the Oil and Gas industry performs poorly. This suggests that the Oil and Gas industry also performs poorly with respect to Social and Governance.  On the other side, the Media, Pharmaceuticals, and Banks industries perform well.  This suggests that these industries perform poorly with respect to Social and Governance. Obviously, more analysis is needed but the charts show that the individual ESG scores may be more important than the aggregate ESG score. 

  Today, I will be starting my ESG blog.  Normally, I work with ESG data from Thomson Reuters (ASSET4); however, this data comes with limitations.  I have recently started working with ESG data from Yahoo Finance.  I will be using this data for this blog since Yahoo Finance's data license allows free use of data for research and educational purposes. The chart below shows the mean Total ESG scores for each industry in the S&P 500. Although there are 500 companies in the S&P 500 only 443 have Total ESG scores.  The ESG scores are static meaning they are updated periodically. The chart represents the data downloaded in January 2022. I should add the lower the ESG score the less ESG risk. Thus, the real estate industry has lower ESG risk than the Oil & Gas production industry.