Not logged in.
Quick Search - Contribution
Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Aggregate Confusion: The Divergence of ESG Ratings |
| Organization Unit | |
| Authors |
|
| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
|
| Journal Title | Review of Finance |
| Publisher | Oxford University Press |
| Geographical Reach | international |
| ISSN | 1572-3097 |
| Volume | 26 |
| Number | 6 |
| Page Range | 1315 - 1344 |
| Date | 2022 |
| Abstract Text | This paper investigates the divergence of environmental, social, and governance (ESG) ratings based on data from six prominent ESG rating agencies: Kinder, Lydenberg, and Domini (KLD), Sustainalytics, Moody’s ESG (Vigeo-Eiris), S&P Global (RobecoSAM), Refinitiv (Asset4), and MSCI. We document the rating divergence and map the different methodologies onto a common taxonomy of categories. Using this taxonomy, we decompose the divergence into contributions of scope, measurement, and weight. Measurement contributes 56% of the divergence, scope 38%, and weight 6%. Further analyzing the reasons for measurement divergence, we detect a rater effect where a rater’s overall view of a firm influences the measurement of specific categories. The results call for greater attention to how the data underlying ESG ratings are generated. |
| Free access at | DOI |
| Official URL | https://doi.org/10.1093/rof/rfac033 |
| Digital Object Identifier | 10.1093/rof/rfac033 |
| Other Identification Number | merlin-id:18058 |
| PDF File |
Download from ZORA
|
| Export |
BibTeX
EP3 XML (ZORA)
|