“ESG rating agencies fulfil the need for knowhow” – Financial Times – May 12, 2019

On May 12, 2019 the Financial Times reported on the “wave of consolidation in ESG rating services, which have flourished in the past decade.

Providers range from standalone shops, such as Sustainalytics and Vigeo Eiris, to the ESG arms of bigger groups, including those of index providers MSCI and FTSE Russell.

Their business is booming as interest in ESG surges. Rating companies are increasingly influential in determining how capital is allocated as they help index providers and fund managers understand vague terms such as “sustainability” in relation to companies and bond issuers.

Assets invested sustainably have passed the $30tn mark, according to the Global Sustainable Investment Alliance, based on a classification that encompasses funds using ESG criteria to guide investing. Interest in responsible investment has risen in line with the growth of passive investing and the number of ESG-focused equity indices has risen sharply. S&P Dow Jones Indices, one of the market leaders, has more than 75 ESG indices.”

Registered users may read the article on the Financial Times internet site.