6/30/24, 9:13 PM (11) (PDF) ESG score prediction through random forest algorithm

Home 11 More

Article Full-text available

ESG score prediction through random forest algorithm
Jun 2022 · Computational Management Science 19(1)
DOI: 10.1007/s10287-021-00419-3
Valeria D’Amato · Rita laura d'ecclesia · Susanna Levantesi

Research Interest Score 35.2

Citations 34
Recommendations 0
Reads 4,787
Learn about stats on ResearchGate
Download Share More

Overview Stats Comments Citations (34) References (117)

Abstract and figures

Environment-related risks affect assets in various sectors of the global economy, as well as social
and governance aspects, giving birth to what is known as ESG investments. Sustainable and
responsible finance has become a major aim for asset managers who are regularly dealing with the
measurement and management of ESG risks. To this purpose, Financial Institutions and Rating
Agencies have created an ESG score aimed to provide disclosure on the environment, social, and
governance (corporate social responsibilities) metrics. CSR/ESG ratings are becoming quite popular
even if highly questioned in terms of reliability. Asset managers do not always believe that markets
consistently and correctly price climate risks into company valuations, in these cases ESG ratings,
when available, provide an important tool in the company’s fundraising process or on the shares’
return. Assuming we can choose a reliable set of CSR/ESG ratings, we aim to assess how structural
data- balance sheet items- may affect ESG scores assigned to regularly traded stocks. Using a
Random Forest algorithm, we investigate how structural data affect the Thomson Reuters Refinitiv
ESG scores for the companies which constitute the STOXX 600 Index. We find that balance sheet
data provide a crucial element to explain ESG scores.

https://www.researchgate.net/publication/356729780_ESG_score_prediction_through_random_forest_algorithm 1/3
6/30/24, 9:13 PM (11) (PDF) ESG score prediction through random forest algorithm

+11

Content available from Computational Management Science

This content is subject to copyright.Terms and conditions apply.

Publisher Full-text 1

Access to this full-text is provided by Content available from Computational

Indian Institute of Management Management Science
Udaipur. This content is Terms and
Learn more subject to copyright. conditions apply.

ESG score prediction through random forest View full-text

algorithm.pdf
8.48 MB

Company
About us
Blog
Careers
https://www.researchgate.net/publication/356729780_ESG_score_prediction_through_random_forest_algorithm 2/3
6/30/24, 9:13 PM (11) (PDF) ESG score prediction through random forest algorithm

Resources
ResearchGate Updates
Help Center
Contact us
Business Solutions
Marketing Solutions
Scientific Recruitment
Publisher Solutions

Terms Privacy Copyright Imprint

© 2008 - 2024 ResearchGate GmbH. All rights reserved.

https://www.researchgate.net/publication/356729780_ESG_score_prediction_through_random_forest_algorithm 3/3