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week 2 Sustainable Data and ESG Investing

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Questions and Answers

What did the International Organization of Securities Commissions criticize ESG rating providers for?

Failure to communicate effectively with companies
Poor communication with investors
Overemphasis on sustainable attributes
Lack of transparency in their methodologies (correct)

Which factor contributes the most to the divergence in sustainable headline ratings according to MIT Sloan researchers?

Chosen indicators that yield numerical measures (correct)
Chosen attributes that constitute sustainability performance
Communication with companies
Aggregation of ratings

Why do sustainable rating providers have incentives to be opaque according to commentators?

To maintain a proprietary hold on their methodology (correct)
To improve communication with companies
To increase transparency in their revenue streams
To enhance their methodology transparency

What percentage of the rating divergence is attributed to the choice of attributes constituting sustainability performance according to MIT Sloan researchers?

37% (A) Signup and view all the answers

According to IOSCO, what is one reason for ESG rating divergence?

Lack of alignment on definitions (B) Signup and view all the answers

Which factor contributes the least to the divergence in sustainable headline ratings according to MIT Sloan researchers?

Aggregation of ratings (C) Signup and view all the answers

Why do some commentators believe ESG rating providers are deliberately opaque?

Due to a lack of proprietary hold on their methodology (D) Signup and view all the answers

What is one criticism made by IOSCO regarding ESG rating providers?

The need for better communication with rated companies (D) Signup and view all the answers

What does MIT Sloan's research suggest about the differences in sustainable headline ratings?

Differences result from looking at different datasets initially (A) Signup and view all the answers

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