ESG and Sustainable Investing: From Theory to Practice — Vietnam Readiness · Dr MAI Huu MinhChapter 5 of 22 · Module 2: Data and ratings
CHAPTER 5
ESG Ratings and Scores
How ratings are built and why the agencies disagree
Opening question
“Two agencies rate the same company 'leader' and 'laggard'. Which one is right?”
In this chapter
- What an ESG rating measures — and what it does not
- The rating industry and its business model
- How a rating is built: key issues, exposure, management and weights, with a worked example
- Industry-relative versus absolute ratings
- Why ratings diverge: scope, measurement and weights
- How controversies change scores
- Using ratings wisely: combining sources and building your own score
- ESG ratings for companies in Vietnam and Asia
🔒
This chapter is in the full book
Chapter 1 is free to read online. The full text of chapter 5 — with its tables, figures, worked examples and practice lab — is available in the complete edition of ESG and Sustainable Investing: From Theory to Practice — Vietnam Readiness (Volume 4, NXW Investment Library).
Read Chapter 1 freeGet the full book — [email protected]Sections of this chapter
5.1 What does an ESG rating measure?
5.2 The rating industry
5.3 Building a rating
5.4 Industry-relative versus absolute ratings
5.5 Why ratings diverge
5.6 Controversies
5.7 What ratings are good for — and what they are not
5.8 Using ratings wisely
5.9 ESG ratings in Vietnam and Asia