A Novel Rating Model Basing on ESG Disclosure

Abstract

This article has discussed a new way to explore the relationship between the company's disclosure and the company’s ESG performance. during the exploration, this article has proved the feasibility to evaluate a company’s ESG performance by analysing its public disclosure. Furthermore, this article creates a novel approach to rating the ESG performance of an unknown company. With the validation, the method is adequate to meet real-life requirements and can rate a listed company’s ESG level with a minimum error. That offer a possible solution to evaluate the ESG performance of a company do not have mature ESG rating information. This article also found the relation between a company’s ESG performance to its financial performance in different industries within different periods. It found that the large-scale systematic crisis will undermine the ESG value. And the size of ESG value is well connected to the market prosperity and national economic situation.