How ESG scores are calculated
How IdealRatings scores individual holdings, and how those scores are aggregated into a portfolio's overall and pillar ESG scores.
ESG scores are sourced from our data provider, IdealRatings. This page explains how individual holdings are assessed at the company level, and how those scores are then aggregated into a portfolio's ESG score.
Indicator evaluation
IdealRatings evaluates over 150 indicators for each holding, spread across the Environmental, Social, and Governance categories.
Sector-specific weighting
Indicator weights vary by sector, so the scoring reflects the ESG risks most material to that industry — for example, emissions metrics carry more weight for an energy company than a software company. These weighted indicators produce a company's standalone E, S, and G pillar scores.
Scope of assessment
Each pillar draws on a distinct set of indicators:
- Environmental — environmental policies and management systems, energy and emissions metrics, water and waste programmes, biodiversity impact, and legal compliance track record.
- Social — local supplier procurement practices, workforce composition (e.g. local vs. foreign hire ratios for low-skilled workers), and stakeholder engagement.
- Governance — board structure and independence, audit and risk oversight, disclosure practices, anti-corruption policies, and shareholder rights.
Portfolio-level aggregation
A portfolio's ESG score — and its Environment, Social, and Governance pillar scores — is the weighted average of its holdings' scores, weighted by each holding's portfolio weight (% of AUM).
Holdings that IdealRatings hasn't scored are excluded from the calculation, and the remaining holdings' weights are renormalised so they sum to 100%. This mirrors the coverage percentage shown when exporting an ESG PDF report.
Related features
- Understand ESG analysis
- Export an ESG PDF report — sharing ESG scores with end clients