ESG ratings: an industry in need of a major overhaul

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dc.contributor.authorCharlin, Ventura
dc.contributor.authorCifuentes, Arturo
dc.contributor.authorAlfaro Nicolás, Jorge
dc.date.accessioned2024-01-10T13:10:41Z
dc.date.available2024-01-10T13:10:41Z
dc.date.issued2022
dc.description.abstractThe impetus for adopting ESG-sensitive investment policies has increased steadily since 2006, when the United Nations outlined its Principles of Responsible Investment (PRI). Recently, a new industry aimed at helping investors to make sound ESG-driven decisions has flourished: ESG rating agencies. We investigated the ratings provided by four leading rating agencies (ISS, MSCI, S&P, and Sustainalytics) to the companies in the S&P500 index. Using measurement theory techniques, we concluded that ESG ratings currently exhibit an abysmally low level of reliability (18.3%) and agreement (5.4%). This situation differs sharply not only with the levels of reliability and agreement found in credit ratings but also with the reliability and agreement found in areas where subjectivity plays an important role, for example, wine ratings. These findings challenge the claim that ESG ratings can be helpful to make investment decisions, as they suggest that the ESG ratings industry as a whole is in much disarray.
dc.fechaingreso.objetodigital2024-05-09
dc.fuente.origenScopus
dc.identifier.doi10.1080/20430795.2022.2113358
dc.identifier.eissn2043-0809
dc.identifier.issn2043-0795
dc.identifier.scopusidSCOPUS_ID:85136485476
dc.identifier.urihttps://doi.org/10.1080/20430795.2022.2113358
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/77911
dc.identifier.wosidWOS:000842283400001
dc.information.autorucFacultad de economía y administración ; Alfaro Nicolás, Jorge ; 0000-0003-2054-9693 ; 233510
dc.language.isoen
dc.nota.accesocontenido parcial
dc.publisherTaylor and Francis Ltd.
dc.revistaJournal of Sustainable Finance and Investment
dc.rightsacceso restringido
dc.subjectESG
dc.subjectESG investments
dc.subjectESG ratings
dc.subjectRating agencies
dc.subjectRatings agreement
dc.subjectRatings reliability
dc.subjectSocially responsible investments
dc.subject.ods09 Industry
dc.subject.odspainnovación e infraestructura
dc.titleESG ratings: an industry in need of a major overhaul
dc.typeartículo
sipa.codpersvinculados233510
sipa.indexScopus
sipa.trazabilidadCarga SIPA;09-01-2024
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