The proliferation of different ESG metrics and ratings has accelerated in recent years, allowing investors to analyse opportunities in ways that were previously impossible. James Baxter-Derrington talks to ESG investment specialists about current issues in the ESG ratings market and how the market might look in years to come.
Back in May, researchers from MIT Sloan and the University of Zurich published their paper Aggregate Confusion: The Divergence of ESG Ratings, that concluded, among other things, that "the level of disagreement [between ratings] is so severe that ratings agencies reach not just different, but opposite conclusions". One of the main factors they attributed this divergence to was "rater-specific bias" driven by both "differences in opinions" and "disagreements about underlying data". While many in the industry believe "diversity of views is a good thing" others argue "there is a need for...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
