Innocheque Project: ESG Scoring Engine
ESG assessment is essential, covering diverse topics from waste management to tax transparency. It’s mainly self-reported by companies, posing challenges in verification.
Factsheet
- Lead school Business School
- Institute(s) Institute for Applied Data Science & Finance
- Funding organisation Innosuisse
- Duration (planned) 01.11.2022 - 31.10.2023
- Project management Prof. Dr. Jörg Robert Osterrieder
- Head of project Prof. Dr. Jörg Robert Osterrieder
-
Project staff
Prof. Dr. Jörg Robert Osterrieder
Prof. Dr. Branka Hadji Misheva
Yiting Liu
Lennart John Baals - Keywords ESG Performance, Transparency, Sustainability Measurement
Situation
We will develop a proprietary rubric that reflects the WEF’s core metrics of governance, planet, people, and prosperity, and a firm’s sustainability transparency to score the companies related to their sustainability performance. The company will develop a tool that assesses the ESG performance of companies using publicly available data sources. We measure sustainability performance as follow: o Pillar I (ESG metrics): Performance of a firm based on the WEF metrics in 18 core metrics. o Pillar II (Transparency): Transparency, when it comes to reporting on ESG performance commitment, according to a recognized standard (e. g WEF, SDG & UN Global Compact). o Pillar III (Impact): External impact made by the firm through their pro-bono, ESG skills, ESG product and services, thought leadership publications and events. The outcome of this project will therefore be a concept and prototype for an objective ESG scoring engine. If successful, this tool will a) increase transparency of ESG reports b) augment existing scores and give a more comprehensive picture c) lay the foundation for improving ESG performance of a company.
Course of action
This study will allow us to: - To scale up our analysis and approach and apply it in an automated way. - To have an independent, academic verification and extension of our approach, so that we can build a product out of it Based on an existing low-fidelity data analysis and visualization prototype, we expect to complete a high-fidelity prototype with a user-interface that allows for various data explorations using existing, yet hitherto non-integrated public and company data to achieve the following objectives: • The study will benefit the company by getting further clarity on effort and complexity of the platform development. It will also provide guidance for the platform’s development strategy and product roadmap. • Estimation of the design requirements, identify potential risks involved with the solution, analysis of the competitive situation and current trends. The study will uncover insufficiently satisfied needs and desires of potential clients in the data assessment and utilization phase. • Proof of concept, first feedback on the prototype • With this pre-study we want to validate the potential of a follow-up innovation project and, if applicable, clarify its direction and scope.
Result
The development of a proprietary rubric for assessing the ESG performance of companies aims to reflect the WEF core metrics and sustainability transparency. Through a tool to be developed, based on public data, companies are evaluated considering performance, reporting transparency, and external impacts. This not only promotes transparency and expands existing evaluations but also lays a solid foundation for enhancing ESG performance. The aim of the study is to scale the analysis and approach, as well as to independently and academically review and expand our approach to develop an innovative product.
Looking ahead
Developing an ESG rating tool promises more transparent corporate performances and provides new insights into sustainable practices, offering innovative, scalable solutions to challenges in the ESG sector.
