ESG metrics, pivotal to sustainable finance, face intensified scrutiny for precision and representativity. Recent concerns stem from potential retroactive score adjustments and data aggregation, risking misrepresentation of company performance. We find that Refinitiv’s rating methodology may obscure genuine company progress by artificially inflating high-ranking firms’ scores with new, lower-performing entrants while diminishing actual advancements due to peer competition. Our analysis, spanning 2012-2021 across three key sectors, indicates only 41% of score variation relates to company disclosures. To rectify these issues, we propose replacing Refinitiv’s percentile ranking with the ’performance ratio’ scoring method. Our analysis reveals a significant correlation between Refinitiv’s current approach and our performance ratio method. However, the latter is less affected by new entrants and peer comparison, maintaining robust- ness against outliers. Our findings underscore the necessity for a refined ESG scoring system aligning more accurately with corporate sustainability efforts and actual representation of the underlying data.