Rating divergence

    ESG & Governance

    Disagreement between ESG rating providers about the same company.

    A 2022 study by Berg, Kölbel and Rigobon found an average correlation of only 0.54 between the overall ESG ratings of six providers, with governance the least consistent pillar. It traced 56% of the divergence to measurement (rating the same issue differently), 38% to scope (covering different issues) and 6% to weights. Divergence means that fund holdings, index membership and research results can depend on which provider is used.

    Related terms

    ESG ratingESG scoreESG rating provider (ERP)Core ESG rating

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    From the research

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