Different ESG rating agencies (MSCI, Sustainalytics, Refinitiv, etc.) use different methodologies, leading to low correlation among ratings.
Why C (more difficult for companies) is correct:
Companies struggle to improve ESG scores because rating criteria differ significantly across providers.
Example: A company may score high on MSCI but low on Sustainalytics, making it harder to demonstrate ESG improvement.
Why not A or B?
A is incorrect because inconsistency creates challenges rather than making improvement easier.
B is incorrect because ESG ratings do influence corporate ambition to improve sustainability efforts.
[References:, MIT Sloan: "The Inconsistency of ESG Ratings" (2022), , , , , ]
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