In the face of climate change, investors, consumers, regulators, and many other stakeholders increasingly demand firms to become more sustainable and enhance their corporate social performance (CSP). Firms respond to this institutional pressure by pursuing corporate social responsibility (CSR). Where the combined CSP of firms is instrumental in fighting climate change, capturing the individual CSP of firms is difficult due to the non-standardized nature of CSP and the information asymmetries surrounding it. Consequently, both researchers and firm stakeholders predominantly proxy the CSP of firms with Environmental, Social and Governance (ESG) ratings. Since ESG ratings only indicate good or bad CSP, they are an inherently linear estimate of CSP, implicitly assuming that CSR is homogeneous in nature. This implicit assumption contrasts with the heterogeneous CSR approach provided in theoretical CSR literature, and thus clouds the social and financial performance associated with CSR.