ESG Scores
ESG scores, which stands for Environmental, Social, and Governance scores, are a crucial metric used by investors and organizations to assess a company’s sustainability and ethical practices. These scores provide valuable insights into a company’s performance in three key areas:
- Environmental (E): The environmental component evaluates a company’s impact on the planet and its efforts to mitigate environmental risks. It includes factors like carbon emissions, energy efficiency, water management, and waste reduction. A high environmental score indicates a company’s commitment to eco-friendly practices and reducing its ecological footprint.
- Social (S): The social component focuses on how a company interacts with its employees, customers, suppliers, and the communities in which it operates. Key factors in the social score include labor practices, diversity and inclusion, human rights, product safety, and community engagement. A strong social score reflects a company’s dedication to fostering positive relationships and contributing positively to society.
- Governance (G): Governance examines a company’s internal structures, policies, and leadership. It assesses aspects such as board independence, executive compensation, transparency, and the presence of anti-corruption measures. A high governance score signifies strong leadership and a commitment to maintaining high ethical standards and accountability
ESG scores provide investors with a holistic view of a company’s sustainability and ethical practices, allowing them to make more informed investment decisions. These scores are increasingly used to identify socially responsible investments and guide capital towards companies that prioritize long-term sustainability and responsible business practices. As the importance of ESG considerations continues to grow, companies are motivated to improve their ESG scores, not only for ethical reasons but also to attract investors who value sustainable and responsible business practices.
Also known as: environmental social governance, sustainability, ESG rating.
ESG Scores in Python
get_esg_scores is part of the Toolkit module of the open-source Finance Toolkit. Install it with:
pip install financetoolkit -U
Then call get_esg_scores as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["MSFT", "TSLA", "AMZN"], api_key="FINANCIAL_MODELING_PREP_KEY", start_date="2022-08-01", quarterly=False
)
esg_scores = toolkit.get_esg_scores()
esg_scores.xs("MSFT", level=1, axis=1)
Which returns:
| date | Environmental Score | Social Score | Governance Score | ESG Score |
|---|---|---|---|---|
| 2022 | 73.03 | 58.66 | 61.4 | 64.37 |
| 2023 | 72.89 | 58.16 | 60.65 | 63.9 |
| 2024 | 72.53 | 58.08 | 60.7 | 63.77 |
| 2025 | 71.85 | 57.64 | 59.62 | 63.04 |
Parameters
get_esg_scores accepts the following parameters:
- overwrite (bool): Defines whether to overwrite the existing data.
- rounding (int): Defines the number of decimal places to round the data to.
- show_columns (list[str] | None): A list of column names to keep in the result. Invalid names are reported and ignored. Defaults to None, which keeps every column.