ESG momentum

    ESG & Governance

    The change in a company's ESG rating or score over time, used by some investors to favour companies that are improving.

    An ESG momentum strategy buys companies whose scores are rising rather than those with the highest scores today. It can reward real improvement, but score changes can also come from better disclosure or a provider's method change rather than better practice. SEBI's Parivartan Score is built on a similar idea of measuring progress over time.

    Related terms