ESG Ratings

Retrieve and analyze Environmental, Social, and Governance (ESG) ratings and scores for public companies using the Octagon MCP server.

Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See references/mcp-setup.md for installation instructions.

Workflow

1. Identify Analysis Parameters

Determine the following before querying:

Ticker: Stock symbol (e.g., MSFT, AAPL, TSLA)
Specific metrics (optional): ESG score, environmental score, social score, governance score, industry rank

2. Execute Query via Octagon MCP

Use the octagon-agent tool with a natural language prompt:

Retrieve ESG ratings and scores, including risk rating and industry rank, for <TICKER>.

MCP Call Format:

{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Retrieve ESG ratings and scores, including risk rating and industry rank, for MSFT."
  }
}

3. Expected Output

The agent returns comprehensive ESG data including:

Key ESG Metrics:

MSCI ESG Rating (AAA to CCC scale)
Sustainalytics ESG Risk Rating
Composite ESG Score
Environmental Score
Social Score
Governance Score
S&P Global ESG Score
Industry rank and categorization

Example Response:

Metric	Value
MSCI ESG Rating	AAA
ESG Score	65.19
Environmental	74.57
Social	58.08
Governance	62.93
Industry	Enterprise and Infrastructure Software

Data Sources: octagon-companies-agent, octagon-financials-agent, octagon-web-search-agent

4. Interpret Results

See references/interpreting-results.md for guidance on:

Understanding MSCI rating scale
Interpreting Sustainalytics risk ratings
Comparing E, S, and G component scores
Industry ranking context

Example Queries

Standard ESG Analysis:

Retrieve ESG ratings and scores, including risk rating and industry rank, for MSFT.

Environmental Focus:

Retrieve ESG ratings with focus on environmental scores and carbon emissions for AAPL.

Comparative Analysis:

Retrieve ESG ratings and scores for TSLA and compare to automotive industry peers.

Governance Deep Dive:

Retrieve ESG ratings with detailed governance scores and board diversity metrics for JPM.

Key Metrics Explained

Metric	Definition	Scale
MSCI ESG Rating	Overall ESG assessment by MSCI	AAA (best) to CCC (worst)
Sustainalytics Risk Rating	Unmanaged ESG risk level	0-100 (lower = less risk)
ESG Score	Composite sustainability score	0-100 (higher = better)
Environmental Score	Climate, pollution, resource use	0-100
Social Score	Labor, community, human rights	0-100
Governance Score	Board, ethics, transparency	0-100
Industry Rank	Position vs sector peers	Percentile or rank

MSCI Rating Scale

Rating	Category	Meaning
AAA, AA	Leader	Best-in-class ESG performance
A, BBB, BB	Average	Mixed or average ESG performance
B, CCC	Laggard	Below-average ESG, higher risk

Analysis Tips

Component imbalance: A company may score high on Environmental but low on Governance—assess each dimension.
Industry context: ESG scores vary significantly by sector. Compare to industry peers, not cross-sector.
Trend over time: Request historical ESG data to see if ratings are improving or declining.
Materiality: Different ESG factors matter more in different industries (e.g., Environmental for energy, Social for retail).
Multiple sources: MSCI, Sustainalytics, and S&P may give different ratings—consider the consensus view.

Use Cases

ESG screening: Filter investments based on minimum ESG thresholds
Risk assessment: Identify companies with high unmanaged ESG risks
Portfolio alignment: Ensure holdings meet sustainability mandates
Engagement targeting: Identify areas for shareholder engagement
Regulatory compliance: Meet ESG disclosure requirements

esg-ratings