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ESG rating disagreement: Implications and aggregation approaches

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  • Bissoondoyal-Bheenick, Emawtee
  • Bennett, Scott
  • Lehnherr, Rob
  • Zhong, Angel

Abstract

This study explores environmental, social and governance (ESG) rating disagreement among different providers, given the variation and lack of consensus in ESG ratings. We utilize three prominent ESG ratings (Sustainalytics, MSCI and Asset4) and employ four aggregation methods. Our analysis reveals relatively high correlations between ratings provided by Asset4 and Sustainalytics, while MSCI's ratings exhibit negative correlations with both. Further, European countries display lower ESG rating disagreement compared to other regions. This study enhances our understanding of ESG rating disagreement and emphasises the importance of considering and synthesizing multiple ratings when assessing firms' ESG performance.

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  • Bissoondoyal-Bheenick, Emawtee & Bennett, Scott & Lehnherr, Rob & Zhong, Angel, 2024. "ESG rating disagreement: Implications and aggregation approaches," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    • Handle: RePEc:eee:reveco:v:96:y:2024:i:pa:s1059056024005240
    DOI: 10.1016/j.iref.2024.103532
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    References listed on IDEAS

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    6. Barbara Iannone & Pierdomenico Duttilo & Stefano Antonio Gattone, 2025. "Evaluating the Resilience of ESG Investments in European Markets During Turmoil Periods," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(4), pages 5006-5020, July.
    7. Zhang, Hua & Lai, Jie, 2024. "Greening through ESG: Do ESG ratings improve corporate environmental performance in China?," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    8. Kong, Linghui & Chen, Rongquan & Huang, Xinyu & Wang, Fan, 2025. "Can Industry-Specific Information Disclosure Guidelines Alleviate Corporate ESG Divergence? Evidence from Chinese List Companies," International Review of Financial Analysis, Elsevier, vol. 106(C).
    9. Touti, Nihal & Taïb, Asmâa Alaoui & Rekik, Lilia, 2025. "Emerging trends in ESG ratings as risk factors in asset pricing," Finance Research Letters, Elsevier, vol. 82(C).
    10. Gong, Qi & Kong, Zhaoyang & Li, Liang & Dong, Xiucheng & Li, Yang, 2026. "The consequences of hypocrisy: how ESG greenwashing undermines green total factor productivity," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 106(C).
    11. Thi-Ngoc-Mai Le & Phuong-Linh Vu & Anh-Tuan Doan & Thi-Hong-Hanh Dao, 2026. "Improve or worsen: The impacts of corporate sustainability development on firm’s performance," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(1), pages 498-531, February.
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