Measurement concerns and agreement of environmental social governance ratings

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

Measurement quality of environmental, social, and governance (ESG) rating is important, considering the increasing interest in socially responsible investment. This paper examines the measurement quality of four ESG ratings. Comprehensive analysis of the ratings, including its dimensionality, reliability, and validity suggests that they have significantly different measurement construct and measurement concerns, despite some commonalities. This study also presents a novel approach to examine the convergence of ESG ratings by assessing the level of agreement. The results of interrater reliability analysis suggest that while the agreement between ESG scores is low, there is evidence of a low to moderate agreement of ESG rankings.

Original languageEnglish
Pages (from-to)1589-1623
Number of pages35
JournalAccounting and Finance
Volume61
Issue numberS1
DOIs
Publication statusPublished - Apr 2021

Keywords

  • Convergence
  • Environmental social governance
  • Rating
  • Reliability
  • Responsible investment

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