Roberto Rigobon, Society of Sloan Fellows Professor of Management at the MIT Sloan School of Management, speaks with Linda-Eling Lee, the MSCI Sustainability Institute’s founding director, about divergence in sustainability ratings and the importance of innovation and transparency.
Key moments in this video:
0:00: Intro and overview of “Aggregate Confusion: The Divergence of ESG Ratings” research paper
1:44: The three reasons why ratings differ among providers
2:12: The use of different proxies
3:00: Scope differences (differing notions of materiality)
4:53: Philosophical differences
6:09: Comparing ESG ratings with credit ratings
6:45: Comparing ESG ratings with snacks
8:55: Misperceptions inherent in comparing ESG ratings with credit ratings
9:47: Are ESG ratings more like credit ratings or more like sell-side ratings?
11:14: Why sustainability data providers are important
11:52: Comparing ESG ratings to a building
12:45: The value of information dispersion
13:15: The rater effect
14:09: Why divergence among ratings is useful
15:40: Measuring sustainability compared with measuring inflation
16:47: How can we tell if a rating works?
20:23: The importance of raters learning from one another
22:16: Desert-island research
Learn More: info.msci.com/l/36252/2024-04...