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How is the ESG score calculated? Key methods and standards

Updated on
April 3, 2025

Knowing how the ESG score is calculated is no longer just for large corporations.

It’s something every company, big or small, must understand if it wants to stay competitive.

ESG metrics, which measure environmental, social, and governance impact, are becoming a key tool to understand where we are and how prepared we are for what’s coming.

But let’s be honest: most companies have no idea how this is measured.

Is it just about complying with regulations? No. It goes much further.

It’s about knowing whether your company is making decisions that make it more efficient, more attractive to investors, and more aligned with market demands.

In this article, we’ll clear up the confusion.

We’ll look at what you need to measure correctly, which standards exist, and how to start working with real data.

Because without data, there is no strategy.

Starting Point: How Is the ESG Score Calculated?

Before we start reporting or making decisions, we need to understand what exactly an ESG score measures and how it’s calculated.

There’s no magic formula.

ESG scores vary depending on who calculates them, what data is used, and what the company or investor wants to evaluate.

But there is a common base: analyzing how we manage environmental, social, and governance issues in a quantifiable way.

What Does an ESG Score Measure?

An ESG score measures non-financial risks and opportunities.

In other words, how we are impacted by and respond to issues like emissions, employee treatment, or transparency in corporate governance.

It’s not just a pretty number to show off.

This score defines whether we’re reliable, whether we’re exposed to unnecessary risks, and whether we’re ready to compete long-term.

Who Calculates These Scores and What Are the Most Common Methodologies?

This is where it gets interesting. There’s no single entity or universal system.

It depends on who calculates it, what data they use, and what they want to assess.

ESG Rating Agencies

These are companies dedicated exclusively to rating others.

They collect public and private data, apply their own models, and assign a score.

But be careful, each agency has its own criteria, so don’t expect the same rating everywhere.

Specialized Consultancies

Some companies hire consultants for a more personalized evaluation.

This involves custom methodologies, interviews, site visits... more detailed, but also more expensive and slower.

ESG Analysis Solutions

There are also tech solutions that collect your data and automatically calculate your ESG score.

Their advantage is clear, they automate something that would otherwise be a major headache.

In our case, as an ESG solution, we’re not consultants or auditors.

We help gather all your ESG data and connect it to whatever you need: EINF, SBTi, CSRD, ISO certifications, or what comes next.

Custom Methodologies vs. International Standards (SASB, GRI, MSCI...)

Should you follow a standard or build your own model?

It depends on your sector, goals, and stakeholders.

International standards help you speak the same language.

Some of the best known are:

  • SASB: focused on sector-specific material issues

  • GRI: broader, with a social emphasis

  • MSCI: investor-oriented

Can we relax? Not quite.

If you don’t choose a clear methodology, it’ll be hard to prove progress or compare yourself with others.

Calculating the ESG score isn’t hard if you have the right data and a smart strategy.

Now that we’ve covered how it works and who’s behind it, let’s look at how to actually use the score to your advantage.

3 Common Methods for Calculating the ESG Score

There’s no single way to calculate your ESG score, but there are three approaches that most companies and evaluators use.

Each has its own logic and benefits.

1. Quantitative Assessment Based on Standard KPIs

Here, we’re talking real numbers.

Emissions, workplace accidents, gender pay gap, employee turnover...

Everything is measured with clear, verifiable indicators.

The key is choosing relevant KPIs, and ensuring they’re based on up-to-date emission factors that reflect current methodologies.

Measuring just for the sake of it won’t help.

You need to focus on what actually affects your business and generates value.

2. Qualitative Analysis of Reports and Policies

This method focuses on what we say we do.

It reviews codes of conduct, internal policies, annual reports, and public commitments.

The risk?

If there’s no data to back it up, the score becomes empty words.

And that’s no longer enough.

3. Digital Tools With Automated Algorithms

The fastest and most scalable option.

You connect your ESG data, and the system applies algorithms that generate a clear, traceable score.

Advantages? Real-time data, continuous analysis, and the ability to integrate your score into multiple reports: EINF, CSRD, taxonomy, and more.

In our case, we don’t audit or consult.

We are a tech solution that gathers your ESG data and transforms it into something useful for any need.

What to Keep in Mind When Interpreting an ESG Score

An ESG score is not a final grade.

You need to read it in context, understand where it comes from and what it actually measures.

Not All Scores Are Comparable

Two companies may have the same score and still not be at the same level.

It depends on what variables were measured and how deep the analysis was.

Scores Depend on Sector, Geography, and Size

An industrial company cannot be compared with a services firm.

The same applies between countries or between SMEs and multinationals.

ESG risks are not the same.

Scores Can Vary Depending on the Source or Methodology

Your score may change depending on who calculates it.

Why? Because each methodology prioritizes different criteria.

The important thing is to understand which one fits your reality and what you want to use it for.

4 Business Benefits of Knowing Your ESG Score

1. Regulatory Compliance (CSRD, EU Taxonomy, etc.)

Regulations keep growing.

Measuring correctly from the start helps you avoid surprises and report efficiently and without stress.

If your data is already structured, adapting to new standards becomes much easier.

2. Access to Sustainable Financing

More and more investors demand ESG criteria.

If you can’t prove your score, you’re out of the game. It’s that simple.

Having a reliable ESG score opens the door to financing, partnerships, and better terms.

It can also help align your strategy with sustainable finance frameworks that are already being adopted in the market.

3. Improved Corporate Reputation

A strong ESG score says you’re doing things right.

And sooner or later, that shows up in customer trust, employee engagement, and investor interest.

4. Competitive Advantage in the Market

If your competitors aren’t measuring, they’re flying blind.

And in a world with growing regulations and expectations, that’s a risk you don’t need to take.

Knowing where you stand gives you a head start, while others are still figuring it out.

Understanding how your ESG score is calculated is just the beginning.

What really matters is how you use it to your advantage. And that’s what we’ll tackle next.

4 Common Challenges in ESG Scoring (and How to Solve Them)

Calculating your ESG score can seem daunting if you don’t know where to begin or what obstacles to expect.

These are the four most frequent blockers we see, and how you can overcome them without the drama.

1. Scattered or Unstructured Data

Most companies have the data, but don’t know where it is.

It’s spread across departments, Excel files, emails, and disconnected reports.

The solution?

Centralize and structure everything in one place.

Only then can you turn information into something useful and ready to report.

2. Lack of Time or Internal Resources

We get it, daily operations don’t stop.

And if you don’t have a team dedicated to sustainability, ESG scoring ends up on the back burner.

How do we fix it? With automation and simplicity.

Scoring your ESG performance shouldn’t take weeks of manual work. If it does, something’s wrong.

3. No Single Standard to Follow

Which framework is the right one? GRI, SASB, CSRD...? That question creates confusion and inaction.

The key is to translate your ESG data into multiple formats.

One data set should serve many purposes, without redoing everything every time.

4. Overdependence on External Consultants

Many companies hand everything over to consultancies.

While they can add value, this often leads to slow, expensive, and hard-to-scale processes.

What if you could take control from within?

That’s where a tech solution gives you autonomy and real-time visibility.

Why Dcycle Is the Right Solution for Calculating Your ESG Score

We’re not auditors and we’re not consultants.

We are a solution for companies that want to measure and manage their ESG impact clearly, simply, and efficiently.

What Do We Do?

We gather all your ESG information, no matter the format or where it is, and turn it into automatic, traceable scores.

What’s It For?

So you can use that same data for whatever you need:

EINF, CSRD, SBTi, taxonomy, ISO certifications, or any standard the market requires.

The key is to connect data to business objectives.

And for that, you don’t need more consulting.

You need a solution that works. And fast.

Frequently Asked Questions (FAQs)

What Does ESG Mean and Why Is It So Important?

ESG stands for Environmental, Social, and Governance.

Three essential areas to understand the impact and resilience of a company beyond financial results.

Why does it matter?

Because today’s market no longer tolerates a lack of data on sustainability.

And if you don’t measure, you can’t compete.

Is There an Official Way to Calculate the ESG Score?

There’s no single universal formula.

There are standards, methodologies, and rating agencies that evaluate companies, but each uses its own system.

The most important thing is to have structured, adaptable data.

That way, you can respond to any requirement: CSRD, taxonomy, SBTi, ISO and others.

How Do I Know If My Company Needs an ESG Score?

If you report, if you have investors, if you sell to large clients, or if you operate in regulated markets, you need it.

And if not now, you will soon. This is not a passing trend.

It’s about being ready for what is already the new standard.

Can I Calculate the ESG Score Without External Help?

It depends on your team and your resources.

If your data is well organized, you can move forward.

But if not, the smartest move is to use a solution that does it for you.

Just make sure you avoid slow processes or outdated reports.

The key is to maintain control and agility.

How Often Should the ESG Score Be Updated?

The ESG score is not static.

Ideally, it should be updated continuously or at least with each fiscal year.

Why? Because data evolves, regulations change, and what works today might not be enough tomorrow.

Take control of your ESG data today.
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Cristina Alcalá-Zamora
CSRD Specialist | Content Creator

Frequently Asked Questions (FAQs)

How Can You Calculate a Product’s Carbon Footprint?

Carbon footprint calculation analyzes all emissions generated throughout a product’s life cycle, including raw material extraction, production, transportation, usage, and disposal.

The most recognized methodologies are:

  • Life Cycle Assessment (LCA)
  • ISO 14067
  • PAS 2050

Digital tools like Dcycle simplify the process, providing accurate and actionable insights.

What Are the Most Recognized Certifications?
  • ISO 14067 – Defines carbon footprint measurement for products.
  • EPD (Environmental Product Declaration) – Environmental impact based on LCA.
  • Cradle to Cradle (C2C) – Evaluates sustainability and circularity.
  • LEED & BREEAM – Certifications for sustainable buildings.
Which Industries Have the Highest Carbon Footprint?
  • Construction – High emissions from cement and steel.
  • Textile – Intense water usage and fiber production emissions.
  • Food Industry – Large-scale agriculture and transportation impact.
  • Transportation – Fossil fuel dependency in vehicles and aviation.
How Can Companies Reduce Product Carbon Footprints?
  • Use recycled or low-emission materials.
  • Optimize production processes to cut energy use.
  • Shift to renewable energy sources.
  • Improve transportation and logistics to reduce emissions.
Is Carbon Reduction Expensive?

Some strategies require initial investment, but long-term benefits outweigh costs.

  • Energy efficiency lowers operational expenses.
  • Material reuse and recycling reduces procurement costs.
  • Sustainability certifications open new business opportunities.

Investing in carbon reduction is not just an environmental action, it’s a smart business strategy.