Environmental, social and governance (ESG) data availability, marketing presence and regulation continue to increase in the investment community. Recent articles have reported several remarkable instances of score divergence between data vendors. However, those articles did not attempt to determine whether the disparities represented isolated outliers or were a common occurrence in ESG data.
Using a small set of different ESG vendors, we examine how pervasive ESG disparities are and what drives material differences in vendor scores. The results highlight some of the pitfalls that can arise using ESG data for portfolio construction.