ESG Analysis and Sustainable Investment Optimization

Module: Sustainable Tech | Difficulty: Premium

ESG Score

Green Bond Impact Ratio

Comparison

Python Implementation

import numpy as np
from scipy.optimize import minimize

class GreenFinanceAnalyzer:
    def calculate_esg_score(self, E, S, G, weights=(0.4, 0.3, 0.3)):
        return weights[0] * E + weights[1] * S + weights[2] * G

    def optimize_portfolio(self, returns, esg_scores, risk_aversion=1.0, min_esg=0.6):
        n = len(returns)
        mean_r = np.mean(returns, axis=1)
        cov = np.cov(returns)
        def obj(w):
            port_r = np.dot(w, mean_r)
            port_risk = np.sqrt(np.dot(w.T, np.dot(cov, w)))
            port_esg = np.dot(w, esg_scores)
            return -(port_r - risk_aversion * port_risk + 0.1 * port_esg)
        constraints = [{'type': 'eq', 'fun': lambda w: np.sum(w) - 1},
                       {'type': 'ineq', 'fun': lambda w: np.dot(w, esg_scores) - min_esg}]
        return minimize(obj, np.ones(n)/n, bounds=[(0, 0.3)]*n, constraints=constraints).x

Research Insight: ESG analysis using NLP achieves 87% correlation with expert ratings, processing 1000x more companies.