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ESG Ratings and Their Disagreements

S&P Global ESG Scores and the Corporate Sustainability Assessment

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How Does S&P Global's ESG Scoring System Work?

S&P Global's ESG scoring system has a different lineage than MSCI's or Sustainalytics' — it traces its origins to SAM (Sustainable Asset Management), a Swiss company that developed the Corporate Sustainability Assessment (CSA) in the 1990s as the basis for the Dow Jones Sustainability Indices (DJSI). SAM was acquired by S&P Global in 2019 and its methodology now underpins S&P Global ESG Scores. The CSA is distinctive for its questionnaire-driven approach — it relies heavily on direct company responses to detailed industry-specific questions — and for being the scoring engine behind the DJSI, one of the world's most prestigious sustainability benchmarks.

Quick definition: S&P Global ESG Scores are produced through the Corporate Sustainability Assessment (CSA), an annual industry-specific questionnaire that companies complete covering environmental, social, economic, and governance criteria. The CSA is the basis for selection into the Dow Jones Sustainability Indices (DJSI), making it the most invitation-based of the major ESG scoring systems.

Key takeaways​

  • The CSA uses an industry-specific questionnaire covering over 130 questions grouped into approximately 24 criteria across economic, environmental, and social dimensions. The questionnaire differs by industry.
  • Companies invited to complete the CSA respond directly, making the score partially dependent on company participation — companies that do not respond are scored on publicly available information only, typically producing lower scores.
  • The Dow Jones Sustainability Indices (DJSI) — World, Europe, North America, and variants — select companies based on CSA scores, typically admitting the top 10%–20% by CSA score within each industry.
  • S&P Global ESG Scores are used in the S&P 500 ESG Index (which uses a different methodology from the DJSI) and are integrated into S&P's credit rating research.
  • Because the CSA relies heavily on company questionnaire responses, it rewards companies that invest in detailed sustainability reporting and questionnaire response quality — which can diverge from actual ESG performance.

The Corporate Sustainability Assessment Process​

The CSA is conducted annually from April to August (for companies participating in the DJSI cycle):

Invitation: S&P Global invites companies to participate in the CSA — primarily those already in or eligible for DJSI indices, plus others who request inclusion. Companies can choose to participate or not; non-participants are assessed based on public information.

Industry-specific questionnaire: Companies receive a questionnaire tailored to their industry, containing questions across economic, environmental, and social dimensions. Questions are designed to assess both policy/program quality and performance metrics. A chemical company's questionnaire will ask about chemical safety, process safety, and regulatory compliance; a bank's will focus on financial inclusion, responsible finance, and governance.

Document submission: Companies submit supporting documents — sustainability reports, policies, certifications, auditor reports — alongside questionnaire responses. S&P verifies a subset of submissions to check consistency between claims and documentation.

Scoring: Responses are scored using predefined criteria. Each criterion is scored on a percentage basis (0%–100%), with industry-specific weights determining the contribution to the overall score. Overall scores reflect the weighted average across all criteria.

Annual update cycle: CSA results are published annually, typically in September. Companies that are members of DJSI indices are assessed annually; others may be assessed less frequently.

S&P CSA scoring process​

The Dow Jones Sustainability Indices​

The DJSI family uses CSA scores as the primary selection criterion:

DJSI World: Includes approximately the top 10% of companies from the S&P Global Broad Market Index (approximately 7,500 companies) by CSA score within each industry group. Membership is highly selective and considered prestigious — companies publicize their DJSI membership in annual reports and investor communications.

DJSI Europe: Selects the top 20% within each industry from European companies.

DJSI North America and other regional variants follow similar top-percentile selection within each industry.

DJSI membership requires annual requalification — companies that have been members can lose their position if their CSA score drops or peers improve. This annual competitive dynamic creates incentives for continuous CSA improvement among DJSI members.

S&P 500 ESG Index: Different Methodology​

The S&P 500 ESG Index, launched in 2019, uses S&P Global ESG Scores but with a different methodology from the DJSI:

  • It excludes companies involved in tobacco manufacturing, controversial weapons, and small arms
  • Within each GICS industry group, it removes companies with S&P DJI ESG Scores in the bottom 25%
  • The remainder is weighted by float-adjusted market capitalization with an ESG score tilt

This is a best-in-class sector-neutral approach rather than a top-decile selection — it's less restrictive than the DJSI and more diversified. The S&P 500 ESG Index attracted significant attention in 2022 when it removed Tesla (low overall ESG score driven by governance controversies and supply chain issues) while retaining ExxonMobil (strong CSA performance on disclosure and management quality despite fossil fuel business model concerns).

How S&P ESG Scores Integrate with Credit Analysis​

S&P Global has moved to integrate ESG scores with its credit rating processes. S&P Global Ratings has published ESG Credit Indicators for rated entities — E, S, and G assessments on a 1–5 scale representing how credit-relevant each pillar's ESG factors are for the entity. This integration allows debt investors to assess ESG implications through the credit lens rather than relying solely on equity-oriented ESG scores.

The integration is significant: it signals that ESG factors are increasingly part of fundamental credit analysis at the world's largest credit rating agency, not only an add-on service.

Real-world examples​

Nestlé's DJSI membership: Nestlé has been a long-standing DJSI Food and Beverage sector member, reflecting strong CSA performance on nutrition, water stewardship, and supply chain management. Its DJSI membership is highlighted in Nestlé's investor relations materials as evidence of sustainability leadership — illustrating how prestigious DJSI membership is among large multinationals.

Tesla's S&P 500 ESG Index removal (2022): Tesla was removed from the S&P 500 ESG Index in May 2022, triggering significant controversy. S&P DJI cited Tesla's low S&P ESG Score driven by governance issues (lack of a low-carbon strategy code of business conduct), allegations related to racial discrimination at factories, and the handling of US government investigations. Tesla CEO Elon Musk publicly attacked the decision, calling ESG a "scam." The episode illustrated the non-obvious outcomes of aggregate ESG scoring.

Unilever's CSA leadership: Unilever has consistently achieved top CSA scores in the Personal Products and Food and Beverage sectors, supported by detailed questionnaire responses and comprehensive sustainability reporting. Its DJSI membership and strong S&P Global ESG Scores have contributed to its reputation as a sustainable consumer goods leader.

Common mistakes​

Assuming CSA non-participants have lower ESG quality: Companies that do not participate in the CSA receive lower scores because they are assessed only on public information — but this reflects their investor relations choices, not necessarily their actual ESG performance. Many smaller companies with strong ESG practices simply lack the resources to complete detailed annual questionnaires.

Treating DJSI membership as equivalent to overall ESG performance: DJSI membership means top CSA performance within industry. A company can be a DJSI member and still have significant ESG controversies; it can be excluded from DJSI while having strong actual ESG practices if its questionnaire responses are weak.

Confusing the CSA score with S&P credit ratings: S&P Global ESG Scores are separate from S&P credit ratings, produced by different divisions of S&P Global for different purposes. The new ESG Credit Indicators represent an integration step, but do not mean that the credit rating and ESG score are the same output.

FAQ​

How does a company get invited to the CSA?​

S&P Global invites companies based on index constituency (primarily S&P Global BMI members) and direct company requests to participate. Companies that are not index constituents can request CSA participation. The invitation model means the CSA universe is somewhat self-selected — companies that choose to participate signal at least a minimum level of sustainability engagement.

Is the CSA publicly available?​

The CSA questionnaire is available to invited companies. S&P Global publishes some information about the assessment criteria and industry-specific weighting. Full methodology details are proprietary, though S&P provides more transparency than some other providers. Annual summary reports on CSA findings are publicly available through S&P's corporate sustainability portal.

How does S&P verify CSA responses?​

S&P Global verifies a sample of CSA submissions — checking that supporting documents are consistent with questionnaire answers. Full audit of all responses is not possible given the volume. The verification process is designed to deter misrepresentation but cannot eliminate the risk that companies overstate their ESG practices in questionnaire responses.

Can companies see their CSA benchmarking data?​

Yes — participating companies receive benchmark reports showing how their scores compare to industry peers. This benchmarking is one of the value propositions of CSA participation beyond DJSI eligibility: companies can see where they rank and where their scores are weaker relative to industry leaders.

What is S&P's approach to climate risk specifically?​

S&P Global has developed specific climate analytics beyond the CSA framework — including the S&P Global Physical Risk Scores, Transition Risk Scores, and Climate Change Assessments. These products address climate risk specifically and are used by institutional investors for portfolio climate risk analysis, separate from the comprehensive ESG scoring approach.

Summary​

S&P Global ESG Scores are produced through the Corporate Sustainability Assessment — an annual industry-specific questionnaire that forms the basis for the prestigious Dow Jones Sustainability Indices. The CSA's questionnaire-driven approach rewards companies that invest in detailed sustainability disclosure and questionnaire response quality, selecting the top 10%–20% by CSA score within each industry for DJSI membership. The S&P 500 ESG Index uses a different best-in-class methodology. S&P Global's integration of ESG scores with credit rating analysis represents a significant step toward embedding ESG in mainstream credit markets. The CSA's reliance on questionnaire participation means non-participants receive lower scores regardless of their actual ESG practices — a limitation that investors should account for when comparing companies by S&P ESG score.

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