ESG investing depends on knowing how companies behave—and how they’re perceived. But while traditional ESG ratings have been the industry standard for years, they have limitations. That’s where sentiment data comes in.
This article explores the differences between traditional ESG ratings and real-time sentiment analysis—and how using both offers deeper insights.
What Are Traditional ESG Ratings?
Traditional ESG ratings are provided by firms like MSCI, Sustainalytics, and S&P Global. These ratings are based on company disclosures, regulatory filings, and periodic reviews.
While they offer structure and comparability, they are often:
- Updated quarterly or annually
- Dependent on voluntary disclosures
- Slow to react to controversies or real-world sentiment
What Is Sentiment-Based ESG Data?
Sentiment-based ESG uses Natural Language Processing (NLP) to measure how companies are discussed across media, regulatory, and stakeholder channels.
It reflects:
- Real-time stakeholder perception
- Emotional tone of ESG discussions
- Controversy frequency and intensity
Key Differences
| Aspect | Traditional ESG Ratings | Sentiment-Based ESG |
|---|---|---|
| Update Frequency | Quarterly/Annually | Real-time/Daily |
| Data Sources | Company disclosures, reports | Media, NGOs, regulators, blogs |
| Perspective | Internal view (self-reported) | External view (perceived performance) |
| Controversy Detection | Often delayed | Instant and traceable |
Why Use Both?
- Get a full picture of ESG reality (what’s disclosed + what’s perceived)
- Cross-check credibility of corporate claims
- Act on risks before they appear in official ESG ratings
- Respond faster to controversies and perception shifts
Final Thoughts
ESG analysis is evolving. Traditional ratings provide structure, but sentiment reveals speed, emotion, and public pressure.
By combining both, investors and companies can better manage risk, measure trust, and align with stakeholder values in real time.
See how Sentalyse augments ESG analysis with sentiment insight.