Rating the Raters: Evaluating how ESG Rating Agencies Integrate Sustainability Principles
By Elena Escrig-Olmedo, María Ángeles Fernández-Izquierdo, Idoya Ferrero-Ferrero, J. Rivera-Lirio, María Jesús Muñoz-Torres. Sustainability, 2019
364 citations recorded by the source corpus.
Environmental, social, and governance (ESG) rating agencies, acting as relevant financial market actors, should take a stand on working towards achieving a more sustainable development. In this context, the objective of this paper is, on the one hand, to understand how criteria used by ESG rating agencies in their assessment processes have evolved over the last ten years and, on the other hand, to analyze whether ESG rating agencies are contributing to fostering sustainable development by the inclusion of sustainability principles into their assessment processes and practices according to the ESG criteria. This research is based on a comparative descriptive analysis of the public information provided by the most representative ESG rating and information provider agencies in the financial market in two periods: 2008 and 2018. The findings show that ESG rating agencies have integrated new criteria into their assessment models to measure corporate performance more accurately and robustly in order to respond to new global challenges. However, a deep analysis of the criteria also shows that ESG rating agencies do not fully integrate sustainability principles into the corporate sustainability assessment process.
Subfields: Building and Construction, Marketing, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/3be6251ad309b581840f91cef1aa44456de1ebc3
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Citations in the corpus
- A Bibliometric and Visualization Analysis of Socially Responsible Funds (2019, background): “So, green and sustainable finance is more important nowadays than ever before [1].”
- Does the ESG Index Affect Stock Return? Evidence from the Eurostoxx50 (2020, background): “[43] state that ESG indexes do not fully incorporate sustainability principles in their methodology.”
- How to Design More Sustainable Financial Systems: The Roles of Environmental, Social, and Governance Factors in the Decision-Making Process (2019, neutral): “Sustainability 2019, 11, 5604 8 of 34 Sustainability 2019, 11, 5604 9 of 34 Analysis of the evolution of ESG criteria included in methodologies of rating agencies conducted by Escrig-Olmedo et al. (2019) showed the growing role and importance of environmental criteria since 2008 [64].”