Recently got jobs to do due diligence ESG on two industry telco and banks. Interestingly they score above average. To begin this is what I did (first to find out about how the data is collected)
Most start with S&P reports (https://github.com/monouns/ESG-AI-investment-by-streamlit) without realizing how those reports are generated (ie by survey input from the companies themselves and if there is no report returned to S&P, S&P will ‘input’ for the absent company to the best of their knowledge). In short, at best these are non-verifiable self-reports.
Some of the studies merely extract data from reports without doing any verification (see https://github.com/edgetrader/esg-nlp or https://github.com/aws-samples/aws-esg-evaluation-handson/tree/main/notebooks). Similarly even databrick has its own version of extracting data from self-reports to understand ESG https://github.com/databricks-industry-solutions/esg-scoring
This one provides a scrapping tool and dump data into a file for further analysis. I included this as it is normally a good starting point https://github.com/shweta-29/Companies_ESG_Scraper
The general formula in this extraction is to look for keywords such as policy and performance in the reports in the belief that having a policy or performance metrics somehow equate to accountability and therefore some measurable governance. The last step is usually to apply the result against financial ratios to sustain the relationship between ESG and Financial. See for example https://developers.refinitiv.com/en/article-catalog/article/esg-disclosures
Lastly we have an example of integrating into a portfolio by applying the resultant data (in this case extracted from Bloomberg) https://github.com/LucS12/ESG-Score-Integration or this one https://conscious-investing.herokuapp.com/ (using 2019 data).
Stay tune to the next step …..
Banks – the issue is not so much environment (other than their lending activities) the main issue is banks are subject to the “Social” side and “Governance” side of ESG. This following should give you an idea of where I am heading click here to ABC site