Andy Howard, global head of sustainable investment and ESG at Schroders, has warned against the usefulness of third-party sustainability ratings, arguing that using these in isolation can be a “fools’ errand”.
Speaking at the inaugural Sustainable Investment Festival, Howard said he and his team did use third party scores but only as one part of their in-house analysis process. The reason for this are the significant discrepancies in ratings between the likes of Sustainalytics and MSCI. "Life would have been a lot easier if we could boil all of this down to off-the-shelf measures, of which there are many that exist across the market," said Howard. "But there is not much relationship between them, and the ratings of the commonly used ESG rating schemes do not bear much resemblance to one ano...
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