A Clustering Approach for S&P 500 Index Based on Environmental, Social and Governance Ratings of Multiple Agencies

Celma Ribeiro, Gabriela Curti Geraldo

2025

Abstract

This article addresses the lack of standardization in the assessment of companies' environmental, social and governance (ESG) practices. To avoid implicit bias in selecting a specific rating, this study suggests using multiple assessment sources simultaneously to categorize companies as good or bad from an ESG perspective. Even with the differences in scope, measurement, and weighting between the agencies' methodologies, when applying the clustering algorithm to the ratings of companies within the S&P 500 index, it was possible to observe that the groups formed exhibited significantly different average scores for ESG practices. In this way, this article offers an alternative to mitigate the impact of rating plurality on the results of empirical studies and on the analysis process conducted by investors.

Paper Citation

in Harvard Style

Ribeiro C. and Geraldo G. (2025). A Clustering Approach for S&P 500 Index Based on Environmental, Social and Governance Ratings of Multiple Agencies. In Proceedings of the 7th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB; ISBN 978-989-758-748-1, SciTePress, pages 29-37. DOI: 10.5220/0013211200003956

in Bibtex Style

@conference{femib25,
author={Celma Ribeiro and Gabriela Geraldo},
title={A Clustering Approach for S&P 500 Index Based on Environmental, Social and Governance Ratings of Multiple Agencies},
booktitle={Proceedings of the 7th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB},
year={2025},
pages={29-37},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0013211200003956},
isbn={978-989-758-748-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 7th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB
TI - A Clustering Approach for S&P 500 Index Based on Environmental, Social and Governance Ratings of Multiple Agencies
SN - 978-989-758-748-1
AU - Ribeiro C.
AU - Geraldo G.
PY - 2025
SP - 29
EP - 37
DO - 10.5220/0013211200003956
PB - SciTePress