Misinterpretation of the ESG Controversies Index: A Critical Flaw in Sustainability Research—Evidence From a Hybrid Review

ABSTRACT The ESG Controversies Index provided by Thomson Reuters (Refinitiv) has been widely used in sustainability, finance, and corporate governance research as a proxy for firms' exposure to environmental, social, and governance controversies. However, a number of published studies appear to misinterpret the index by reversing its underlying scale. Specifically, while a score of 100 indicates the absence of controversies and a score of 0 reflects the highest level of controversy exposure, several studies incorrectly assume the opposite interpretation. This methodological inconsistency has the potential to compromise the validity of empirical findings in affected studies. However, the actual consequences depend on the specific empirical context, and our review‐based approach identifies patterns of potential concern rather than demonstrating actual effects. While we cannot establish the magnitude of empirical distortion, our findings highlight the need for greater methodological awareness and transparency in ESG research. In response, this study investigates the extent and implications of the misinterpretation of the ESG Controversies Index through a hybrid review approach combining a systematic literature review and a bibliometric analysis. The study identifies patterns of incorrect index application across the literature, examines their diffusion within academic research, and evaluates the potential methodological and theoretical consequences for ESG scholarship. The findings highlight concerns regarding variable construction, database transparency, and research reliability in sustainability studies. By clarifying the correct interpretation of the ESG Controversies Index, this study contributes to improving methodological rigor, enhancing the credibility of ESG research, and strengthening the reliability of evidence‐based sustainable decision‐making.