ESG ratings and rating agencies

ESG ratings (environmental, social and governance) are carried out by independent organizations. These organizations analyse the ESG performance of companies using a variety of different data, criteria and metrics. The results of these analyses enable the assessment of a company’s sustainability practices and social responsibility, which are awarded in the form of ratings.

There are a number of different organizations, including research companies or rating agencies such as ISS, MSCI or Moody’s, that carry out ESG ratings. As part of the traditional approach, these rating agencies consolidate company and sustainability reports as well as publicly available data. The resulting data analyses are published in the form of ratings, rankings or scores, making it possible to compare companies across sectors in terms of their ESG performance.

It should be noted that rating agencies sometimes use different methodologies and weightings for the preparation of ESG ratings. As a result, results and ratings may vary from agency to agency. Companies should therefore carefully examine and understand the criteria and methods used in order to obtain a well-founded assessment of their ESG performance.

The impact of ESG ratings should not be underestimated, as many rating agencies carry out both mandated and non-mandated ratings. This entails the risk that an unsolicited rating is carried out for a company that does not actively promote ESG. As ESG ratings are often used by investors or financial institutions to make investment decisions, a poor rating can significantly impair a company’s competitiveness.

Scroll to Top