TY  - JOUR
A1  - Billio, Monica
A1  - Costola, Michele
A1  - Hristova, Iva
A1  - Latino, Carmelo
A1  - Pelizzon, Loriana
T1  - Inside the ESG ratings: (Dis)agreement and performance
T2  - Corporate social responsibility and environmental management
N2  - We analyze the ESG rating criteria used by prominent agencies and show that there is a lack of a commonality in the definition of ESG (i) characteristics, (ii) attributes and (iii) standards in defining E, S and G components. We provide evidence that heterogeneity in rating criteria can lead agencies to have opposite opinions on the same evaluated companies and that agreement across those providers is substantially low. Those alternative definitions of ESG also affect sustainable investments leading to the identification of different investment universes and consequently to the creation of different benchmarks. This implies that in the asset management industry it is extremely difficult to measure the ability of a fund manager if financial performances are strongly conditioned by the chosen ESG benchmark. Finally, we find that the disagreement in the scores provided by the rating agencies disperses the effect of preferences of ESG investors on asset prices, to the point that even when there is agreement, it has no impact on financial performances.
KW  - Corporate Social Responsibility
KW  - ESG rating agencies
KW  - sustainable investments
Y1  - 2021
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/63852
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-638523
SN  - 1535-3966
N1  - Funding information: Leibniz Institute for Financial Research SAFE, Frankfurt; European Investment Bank (EIB) for the project 'ESG-Credit.eu - ESG Factors and Climate Change for Credit Analysis and Rating'
VL  - 28
IS  - 5
SP  - 1426
EP  - 1445
PB  - Wiley
CY  - Chichester
ER  -