Environmental, Social, and Governance Performance of Top-Rated Supply Chain Companies: A Quantitative Assessment Model

The objective of this paper is to create a quantitative method to determine the Environmental, Social and Governance (ESG) score of a company in order to mitigate the subjectivity or bias inherent in current ESG scoring methodologies. An ESG score is a metric that tells a consumer how well a firm is performing in meeting Environmental, Social and Governance aspects that are relevant to the firm. This paper effectively develops a new ESG scoring system based off of the Global Reporting Initiative ESG standards framework. Using this framework, ESG scores were calculated for companies in the Gartner Supply Chain Top 25 and compared to the scores given to the same companies from Bloomberg. The ESG scoring system proposed in this paper is an easy to use, transparent system that can be implemented to evaluate the ESG efforts of any company that makes their ESG data available to the public. It was found that companies who are inherently poor environmentally, socially, and governance end up on lists like Gartner’s and other such rankings. The reasoning behind these companies being on these lists are hard to find. They lack transparency. This proves the need for a scoring system like the one described in this paper. The score system created for this research fills this gap and the need for a transparent, easy to use scoring system. This system can be broadly utilized to all companies who publicly report their corporate responsibility efforts. It eliminates the need for an expensive, third party company to do the footwork of coming up with a score, and allows the user to easily find the information themselves