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?

    <p>37%</p> Signup and view all the answers

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

    <p>Lack of alignment on definitions</p> Signup and view all the answers

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

    <p>Aggregation of ratings</p> Signup and view all the answers

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

    <p>Due to a lack of proprietary hold on their methodology</p> Signup and view all the answers

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

    <p>The need for better communication with rated companies</p> Signup and view all the answers

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

    <p>Differences result from looking at different datasets initially</p> Signup and view all the answers

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