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As consumers become more socially and environmentally conscious, corporates and investors have to adapt to stay competitive. Asset managers, credit rating agencies, and risk assessment teams are turning to ESG scores to monitor how companies are navigating global issues.

ESG scores rank companies based on their reputation and impact relating to environmental (E), social (S), and governance (G) issues. Investors might use these benchmarks to select companies that are better positioned to prepare for climate risks, avoid the market volatility associated with scandals or social backlash, or even outperform the broader market. 

However, ESG scores are often subject to inaccuracies. Because a company’s environmental or social impact cannot be measured with traditional datasets like financial statements or SEC filings, the scores depend heavily on companies’ self-reported data. 

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The post ESG Scores Are Crucial For Achieving Corporate Sustainability Goals & Driving Investor Confidence. AI Is Taking Them Beyond Greenwashing appeared first on CB Insights Research.