More Standardisation Required For ESG Scoring In Asset Management – Comparative Study

A comparative study by a Maltese researcher has highlighted the need for standardisation of rules and regulations on ESG information.

Christian Buhagiar, who recently completed his Master's dissertation at the London School of Business and Finance, said that ESG information is increasingly valuable for corporations, the public, governmental bodies and NGOs. Such standardisation, he concluded, would result in "better and comparable outputs from research providers for the benefit of asset managers in generating the desired out-performance".

His study explained that financial markets can help to direct private capital to more sustainable investments but that, as demand grows, ESG rating and scoring mechanisms have become crucial. However, unlike credit rating agencies criteria for bonds, there is still no established industry accord on ESG rating methods being used.