13 new ESG Scores released on Datastream

The following message is copied directly from Thomson Reuters content notification DN093509. It applies to Thomson Reuters Datastream, specifically Environmental, Social and Governance (ESG) data. There has been no change in the ASSET4 Excel template which can be used to access this data. The 2015 ASSET4 ESG data glossary (Excel format) offers an additional reference of the relevant datatypes. A copy of this message is also available as a PDF.

Thirteen new ESG Scores measures have been added to Datastream.

Thomson Reuters ESG Scores are an enhancement and replacement for the existing equally weighted ASSET4 ratings*. They reflect Thomson Reuters’ new strategic ESG framework.

* NB: We advise all users of the ASSET4 ratings to migrate to the new ESG Scores in the coming months, as we plan to retire the ratings in early 2018.

Key enhancements over the legacy equal-weighted ASSET4 ratings are:

1. ESG controversies overlay
2. Industry and Country benchmarks at the data point scoring level
3. Automatically adjusted Category scores based on the size and impact of each category
4. Percentile Rank scoring methodology where hidden layers of calculations are eliminated

The new scores are designed to transparently and objectively measure companies’ relative ESG performance across ten themes as shown in the chart below.

A combination of the ten categories makes up the ESG Score, which is discounted when there were ESG controversies to calculate the ESG Combined Score. Where there were no controversies for a particular period, the ESG Combined Score and ESG Score have the same value. The ESG Controversies score is calculated per fiscal period, with the latest controversies being reflected in the latest complete period.
Thomson Reuters ESG Scores are calculated and available for all companies and historical fiscal periods in the ESG Global Coverage, consisting of 6,000+ public companies globally.

Below are the corresponding Datastream datatypes, titles and definitions.

DS Datatype	DS Title	DS Definition
TRESGS	ESG Score	ESG Score is an overall company score based on the self-reported information in the environmental, social and corporate governance pillars.
TRESGCS	ESG Combined Score	ESG Combined Score is an overall company score based on the reported information in the environmental, social and corporate governance pillars (ESG Score) with an ESG Controversies overlay.
TRESGCCS	ESG Controversies Score	ESG Controversies Score measures a company’s exposure to environmental, social and governance controversies and negative events reflected in global media.
TRESGENRRS	Resource Use Score	Resource Use Score reflects a company’s performance and capacity to reduce the use of materials, energy or water, and to find more eco-efficient solutions by improving supply chain management.
TRESGENERS	Emissions Score	Emissions Score measures a company’s commitment to and effectiveness in reducing environmental emission in the production and operational processes.
TRESGENPIS	Environmental Innovation Score	Environmental Innovation Score reflects a company’s capacity to reduce the environmental costs and burdens for its customers, thereby creating new market opportunities through new environmental technologies and processes or eco-designed products.
TRESGCGBDS	Management Score	Management Score measures a company’s commitment to and effectiveness in following best practice corporate governance principles.
TRESGCGSRS	Shareholders Score	Shareholders Score measures a company’s effectiveness in the equal treatment of shareholders and the use of anti-takeover devices.
TRESGCGVSS	CSR Strategy Score	CSR Strategy Score reflects a company’s practices to communicate that it incorporates the economic (financial), social and environmental dimensions in its day-to-day decision-making processes.
TRESGSOWOS	Workforce Score	Workforce Score measures a company’s effectiveness towards job satisfaction, healthy and safe workplace, maintaining diversity and equal opportunities, and development opportunities for its workforce.
TRESGSOHRS	Human Rights Score	Human Rights Score measures a company’s effectiveness in respecting the fundamental human rights conventions.
TRESGSOCOS	Community Score	Community Score measures the company’s commitment to being a good citizen, protecting public health and respecting business ethics.
TRESGSOPRS	Product Responsibility Score	Product Responsibility Score reflects a company’s capacity to produce quality goods and services, incorporating the customer’s health and safety, integrity and data privacy.

The ESG Controversies Score is calculated based on 23 ESG controversy topics and measures a company’s exposure to environmental, social and governance controversies and negative events reflected in global media

For more details, you can click here to refer to the full methodology paper. In particular, you can consult page 12 for a high-level comparison between the two scoring methods.