CefES Working Papers

Common Factors Behind Companies’ Environmental Ratings

by Gianluca Gucciardi, Elisa Ossola, Lucia Parisio, and Matteo Pelagatti


The increasing interest in sustainability within economics and finance has led to the widespread adoption of Environmental, Social, and Governance (ESG) metrics, expressed as ratings or in- dices, for assessing firms’ sustainable performance. However, inconsistencies among data providers stem not only from definitional differences but also from disagreements in measuring ESG factors.

This paper proposes a novel approach by conversely focusing on ESG factors common to data providers. Through three empirical approaches—correlation analysis, principal component analysis, and panel data regressions—we aim to understand the structural components shaping ESG metrics, particularly in the Environmental Pillar. Our findings emphasize a limited number of indicators that act as common factors across three providers, primarily concerning the management of natural resources. Despite their shared thematic focus, depending on the provider, these indicators are approached with different perspectives—such as risk management, corporate impact management, and integration into corporate strategy. This analysis offers valuable insights for companies, financial institutions, practitioners, scholars, and policymakers, enabling more concise information for analyses and decision-making in their respective fields.