ESG Debt Scores Are Inconsistent, Unreliable, JPMorgan Says Bloomberg Law
Impact Investing Forum 2024
London. April 24-25, 2023.
Nov. 5, 2021, 4:04 PM
Lack of uniform data on ESG criteria causes ratings headacheESG scores impact investment decisions, index composition
Investors wanting to evaluate bonds on environmental, social and governance criteria in the rapidly growing sustainable finance market have a problem: The rating system isn’t reliable.
That’s according to a new report from JPMorgan Chase & Co. researchers, who found very little consistency among different ESG score providers. A lack of standardized data on basic issues contributes to the difficulty.
“Until the market agrees on a uniform set of consistent disclosures akin to GAAP accounting standards, it is hard to see how ESG ratings can become more objective,” JPMorgan strategists led by Nathaniel Rosenbaum wrote in a report Thursday.