“‘Sustainalytics is probably the premier data provider for ESG,’ Horstmeyer says. A number of firms are jockeying for position in the space or hoping to carve out a niche, including each of the big three credit rating agencies: Fitch Ratings, Moody’s Corp. (ticker: MCO) and S&P.”
[COMMENTARY]The writer of the article cites that the regular credit rating agencies all have similar credit ratings for a given security. However, the ESG rating firms don’t with regard to ESG. Personally, I think that’s a good thing as each rating firm sees various ESG criteria differently.
The uniformity in regular credit ratings I believe is a disservice to investors. It offers the opportunity for the type of crises we had in 2008/9 where credit rating agencies were afraid to downgrade securities they knew might be questionable because of a ‘herd’ mentality.
Who Will Be the Moody’s of ESG Investing? By John Divine, February 7, US News, USA.