IDEAS home Printed from https://ideas.repec.org/a/taf/jsustf/v13y2023i2p1075-1109.html
   My bibliography  Save this article

ESG ratings: relevant information or misleading clue? Evidence from the S&P Global 1200

Author

Listed:
  • Lucie Gyönyörová
  • Martin Stachoň
  • Daniel Stašek

Abstract

Environmental, social, and corporate governance (ESG) scores are frequently involved in investment-related decision-making, e.g. for red-flagging or to manage risks. The increasing interest in ESG data raises the question about their validity from various sources. Therefore, we explore the consistency and convergent validity of the well recognized ESG data providers. Exploratory factor analysis of S&P Global 1200 index demonstrates considerable uncertainty across extracted latent factors. Further factor analyses show that the consistency and convergent validity across ESG data significantly depend on the industry type and the country of domicile. These findings are supported by confirmatory factor analyses. Thus, the stakeholders are encouraged to incorporate the company sector and domicile aspects into their decisions. Otherwise, naive use of primary ESG scores may provide a misleading clue.

Suggested Citation

  • Lucie Gyönyörová & Martin Stachoň & Daniel Stašek, 2023. "ESG ratings: relevant information or misleading clue? Evidence from the S&P Global 1200," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 13(2), pages 1075-1109, April.
  • Handle: RePEc:taf:jsustf:v:13:y:2023:i:2:p:1075-1109
    DOI: 10.1080/20430795.2021.1922062
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/20430795.2021.1922062
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/20430795.2021.1922062?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jsustf:v:13:y:2023:i:2:p:1075-1109. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TSFI20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.