Improving your ESG score starts with understanding what rating agencies actually measure, then making targeted changes to your environmental, social, and governance practices and how you disclose them. The process is part operational improvement, part strategic communication. Companies that treat it as a reporting exercise alone tend to plateau, while those that embed ESG into business decisions see scores climb steadily over time.
How ESG Scores Are Calculated
ESG ratings aren’t a single universal number. Different providers use different methodologies, and your score can vary significantly depending on who’s doing the rating. That said, the major frameworks share a common structure built around three pillars: environmental, social, and governance.
MSCI, one of the most widely referenced rating agencies, breaks its assessment into 10 themes and 33 key issues spread across those three pillars. The environmental pillar covers climate change, natural capital, pollution and waste, and environmental opportunities. The social pillar looks at human capital, product liability, stakeholder opposition, and social opportunities. The governance pillar examines board structure, executive pay, ownership and control, accounting practices, business ethics, and tax transparency.
How much each issue matters depends on your industry. MSCI assigns weights based on your sub-industry’s contribution to relevant negative outcomes and the expected time horizon for each issue to materialize. A single key issue can represent anywhere from 5% to 30% of your total rating. Issues classified as high-impact and short-term carry three times the weight of those deemed low-impact and long-term. The governance pillar always receives a minimum weight of 33%, which means governance improvements have outsized influence on your overall score regardless of your industry.
Identify What Matters Most for Your Industry
One of the fastest ways to waste effort is improving metrics that carry little weight for your sector. A technology company pouring resources into water usage reporting while ignoring data privacy practices is optimizing the wrong lever. The SASB Standards (now maintained by the IFRS Foundation) provide a useful framework here. They group companies by shared sustainability risks and opportunities rather than traditional industry codes, and each standard identifies the specific disclosure topics most likely to drive long-term value in that industry.
Start by reviewing the SASB standard for your primary industry to see which ESG topics carry the most financial relevance. If your operations span multiple industries, review additional standards to catch risks that your primary classification might miss. This materiality mapping exercise tells you where to focus first: the issues that rating agencies weight most heavily for companies like yours.
Strengthen Environmental Performance
Environmental metrics are where many companies see the biggest gap between their actual performance and what they report. The core areas rating agencies evaluate include greenhouse gas emissions (Scope 1 from direct operations, Scope 2 from purchased energy, and increasingly Scope 3 from your supply chain), energy efficiency, waste reduction, water management, and biodiversity impact.
Practical steps that move the needle include measuring and publicly reporting your carbon footprint across all three scopes, setting science-based reduction targets with specific timelines, transitioning to renewable energy sources, reducing waste sent to landfill, and improving resource efficiency in manufacturing or operations. Even if your industry isn’t energy-intensive, tracking and disclosing energy consumption signals to rating agencies that you take environmental management seriously.
Scope 3 emissions, which cover everything from supplier operations to product end-of-life, are becoming harder to ignore. The EU’s Corporate Sustainability Reporting Directive mandates Scope 3 disclosure, and even in the absence of federal requirements in the U.S., some state-level laws are moving in the same direction. Getting ahead of Scope 3 measurement now, even with estimated data, positions you better than waiting until it becomes mandatory.
Upgrade Governance Practices
Because governance carries a minimum 33% weight in major rating frameworks, improvements here can lift your overall score more quickly than changes in other pillars. Rating agencies look at board composition, executive compensation structure, ownership transparency, accounting integrity, business ethics policies, and tax practices.
Board diversity and independence are two of the most scrutinized factors. A board that includes a mix of gender, ethnic, and professional backgrounds, with a majority of independent directors, scores materially better than one dominated by insiders. Separating the CEO and board chair roles is another straightforward structural change that signals strong oversight.
Tying executive compensation to long-term ESG performance targets shows rating agencies that sustainability is embedded in decision-making, not just marketing. This doesn’t require a complete overhaul of your compensation plan. Adding ESG-linked metrics to existing bonus or long-term incentive structures, such as emission reduction milestones or employee safety targets, can be implemented within a single compensation cycle.
On the ethics side, having a formal anti-corruption policy, a whistleblower mechanism, and transparent tax reporting practices all contribute positively. Rating agencies also check whether your company has been involved in controversies. If it has, they look at how quickly and transparently you responded.
Build Stronger Social Metrics
The social pillar covers how you treat employees, communities, customers, and supply chain workers. Fair labor practices form the foundation: safe working conditions, equitable pay, progression opportunities, and training and development programs. Companies that conduct human rights due diligence across their supply chains, actively screening for child labor, forced labor, and discrimination, score higher than those that rely on generic supplier codes of conduct.
Employee engagement data, turnover rates, pay equity analyses, and workforce health and safety statistics are all metrics that rating agencies pull into their models. If you’re collecting this data internally but not disclosing it, you’re leaving points on the table. Diversity statistics at the management and board level, along with concrete plans to improve representation, also factor into scoring.
Product liability and customer welfare matter in certain industries more than others. If your business touches consumer health, data privacy, or financial products, the way you handle product safety, data protection, and fair marketing practices will carry significant weight.
Close the Disclosure Gap
Many companies have better ESG practices than their scores reflect simply because they don’t report enough detail. Rating agencies can only score what they can see. If your sustainability report is vague or missing key data points, agencies will either score you lower or rely on estimated data that may not capture your actual performance.
Align your disclosures with the frameworks that rating agencies reference. Publishing a report that follows SASB standards for your industry, reports emissions using the Greenhouse Gas Protocol, and includes governance data matching the metrics MSCI evaluates makes it easier for analysts to find and credit your performance. A double materiality analysis, which describes both how sustainability issues affect your business and how your business affects the environment and society, is now required under the EU’s CSRD and increasingly expected by investors globally.
Timeliness matters too. Publishing your sustainability report months after your annual report means rating agencies may be working with stale data during their review cycle. Aligning the two releases, or publishing ESG data on a rolling basis through your investor relations page, ensures your most current performance is captured.
Get Your Data Independently Verified
Third-party assurance of ESG data works much like a financial audit: an independent assessor, typically an accounting firm, evaluates the credibility of your data, the reliability of your reporting methods, and the completeness of your disclosures. This verification acts as an independent seal of approval that helps prevent greenwashing claims and builds trust with investors, customers, and rating agencies.
There are two levels. Limited assurance is a basic review that checks for calculation and reporting errors and evaluates how well your methods align with industry standards. Reasonable assurance is more thorough, involving recalculation of ESG data, additional documentation, site visits, interviews, and detailed analyses. The CSRD plans to require reasonable assurance by October 2028, so companies subject to EU reporting rules should start building toward that standard now.
Even if assurance isn’t yet mandatory for your company, obtaining it voluntarily signals data quality to rating agencies and can differentiate you from peers who self-report without verification.
Engage Directly With Rating Agencies
Most major ESG rating providers allow companies to review their preliminary scores and provide feedback before final publication. This isn’t just a formality. Errors in industry classification, outdated data, or missed disclosures are common, and the review window is your chance to correct them. Designate someone internally to manage relationships with each rating agency, track their assessment timelines, and respond promptly during review periods.
If your company recently made significant ESG improvements, proactively sharing updated data or new policies with analysts between formal review cycles can accelerate when those changes get reflected in your score. Some agencies also publish detailed methodology documents explaining exactly how they weight each issue. Reading these carefully and mapping your disclosures to their specific data points is one of the highest-return activities you can undertake.
Set a Realistic Timeline
ESG scores don’t change overnight. Most rating agencies update scores annually or semi-annually, and structural improvements like board diversification, supply chain auditing, or emissions reduction take time to implement and even longer to show measurable results. A reasonable expectation is 12 to 24 months before meaningful score improvement from the start of a focused effort, with incremental gains building over subsequent years.
Quick wins tend to come from closing disclosure gaps and correcting data errors during agency review periods. Medium-term gains come from governance changes and new policies. Long-term improvement requires operational changes like reducing emissions, building more resilient supply chains, and embedding ESG considerations into capital allocation decisions. Prioritize in that order, and track your progress against the specific key issues that carry the most weight for your industry.