Bridging the Gap in ESG Measurement: Using NLP to Quantify Environmental, Social, and Governance Communication

Tobias Schimanski, Andrin Reding, Nico Reding, Julia Bingler, Mathias Kraus, Markus Leippold

2023 | Academic | ESG Disclosures, ESG Ratings

Environmental, social, and governance (ESG) criteria take a central role in fostering sustainable development in economies. However, a remarkable gap exists in the precise and transparent measurement of ESG. To address this problem, we propose and validate a new set of NLP models to assess textual disclosures toward all three subdomains of ESG in three steps.