Credit ratings clients of Moody’s, S&P received better ESG scores, SMU study finds
A SCHOLARLY investigation has found a positive correlation between the environmental, social and governance (ESG) scores given to companies by Moody’s and S&P, and their status as paying clients of the ratings agencies.
The researchers from the Singapore Management University (SMU) were careful to caveat their findings are still preliminary, but the correlation suggests score inflation can’t be ruled out and that there is a need to carefully manage conflicts of interest.
The study also found that the increase in scores was more pronounced for companies that disclosed relatively less information on their ESG performance, which the researchers said could have made it easier for manipulation to take place.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
UBS weighs synthetic risk transfer amid capital boost proposals
Oil settles higher on supply concerns in the Mid-East, economic woes subdue gains
S-Reits falter as investors weigh possibility of zero rate cuts in 2024
CapitaLand Investment posts total revenue of S$650 million for Q1
Europe: Stoxx 600 logs best day in three months as banks shine
US: Stocks rally after strong tech results