ESG Data Challenges: User Discretion is Advised

With the emergence of the Environmental, Social, and Governance (ESG) scores to account for corporate social performance, there lies an assumption of equivalence. The purpose of this chapter is to better understand the usability of the Thomson Reuters ASSET4 ESG score, through reflecting on the methodological challenges and implication from a theoretical perspective. The methodological constraints of the scores are found to be influenced in a variety of contexts. This chapter finds that the ESG score should not be taken at its composite value, but rather broken down and scrutinized at the singular indicator level. The view of ESG scores as a proxy for Corporate Social Responsibility (CSR) is challenged and the application of the score is considered from the pragmatic perspective of the intended user: investors.