ESG Ratings Face Skepticism Even as Loan-Market Importance Grows
Companies use ESG ratings to measure progress in reaching sustainability objectives.
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The corporate loan market has a new sheriff in town -- environmental, social and governance ratings providers.
ESG ratings now affect the price borrowers pay on about $32 billion of loans worldwide, up from just $3 billion in 2017, according to BloombergNEF. That’s given considerable influence to ESG graders, such as EcoVadis, Iss-oekom and Sustainalytics, which assess borrowers either against specific targets or using broad-based indexes.