ESG-Rating Systems in the EU. Challenges, Solutions and Regulatory Standards

Master's Thesis , 2023 , 93 Pages , Grade: 1,0

Business economics - Miscellaneous

This study comprehensively examines the Environmental, Social, and Governance (ESG) rating ecosystem, a critical pillar of sustainable finance. It dives into the complexities and nuances of this ecosystem, highlighting key challenges including transparency deficits, inconsistent standardization, sector and regional comparability issues, inherent biases, conflicts of interest, and data quality concerns. In response, the thesis introduces an innovative regulatory framework, which uniquely synthesizes the European Securities and Markets Authority's (ESMA) recommendations with novel insights from the research. This comprehensive framework prioritizes improved transparency, promotes a new approach to standardized ESG rating methodologies, and calls for adaptive, regular revisions to regulatory mechanisms. It also addresses the critical need for global harmonization of ESG rating principles and improved data standardization. Importantly, the thesis deftly balances the demand for standardization with the necessity to preserve the diversity and adaptability inherent in ESG rating methodologies. By identifying gaps in the current system and proposing these unique solutions, the thesis adds a significant perspective to academic discourse in sustainable finance. It suggests practical approaches towards a more robust, reliable, and efficient ESG rating ecosystem.

• College: University of Leipzig
• Grade: 1,0
• Publication Year: 2023
• Pages: 93
• Catalog Number: V1383492
• ISBN (PDF): 9783346946201
• ISBN (Book): 9783346946218
• Language: English
• Tags: ESG, Ratings, CSR, SRI, Environmental, Social, Governance, Standards, European Union, Challenges, Solutions, NFSDR, Rating Agencies, Indicators, ESG-Assesment, Regulation, Regulatory Framework, Transparency of ESG-Ratings, ESG Rating Divergence, Theorization Problem, Commensurability Problem, Conflict of Interests, Compensation of Rating Agencies, Bias, Size Bias, Geographic Bias, Industry Bias, Data Quality, Standardization , CSRD, ESMA, Sustainable Finance