Published: 06 February 2024
Summary
ESG’s increasing importance has led to a proliferation of ratings providers that review an organization’s ESG performance and assign it a rating on related concerns. Strategy leaders should use this research to understand ESG ratings and set long-term ESG goals for their organizations.
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Overview
Key Findings
A number of environmental, social and governance (ESG) ratings providers influence key stakeholder groups like investors, employees, community organizations or activists, and supply chain partners, and each has distinct scoring methodologies.
Although ESG ratings shouldn’t dictate an organization’s ESG strategy, awareness of ratings helps organizations identify material strengths and vulnerabilities and ensures that disclosures meet both regulatory requirements and public expectations.
Understanding which ratings are important to key stakeholders enables strategy leaders to decide on long-term ESG commitments, shift perceptions of the organization and strengthen ESG efforts, both internally and externally.
Organizations should, however, consider ratings as an input
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