ESG-Ratings (Environmental, Social, Governance). Standards, challenges and solutions

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Term discussion SRI and ESG
• SRI - Socially Responsibility Investment
• ESG - Environment, Social and Governance Investing
• Ratings - Standards
• Types of ratings
• Rating Agencies
• Challenges of ratings
• Structured products
• Compensation of rating agencies
• Ratings in ESG
• Difference between credit ratings and ESG ratings
• Approaches of rating agencies
• Regulation of ESG
• Challenges of ESG ratings
• Different approaches
• Transparency
• Bias and reliability
• Lack of independence
• Greenwashing
• Outline of the challenges
• Course of action
• Chosen industries
• Controversy in the fashion industry
• Controversy in the automobile industry
• Evaluation and debate on solutions
• Stricter regulations
• Building a metrics
• Determine own standards
• Recommendation for action and conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This Bachelor thesis aims to analyze the challenges associated with Environmental, Social, and Governance (ESG) ratings. It examines the different types of ratings, the role of rating agencies, and the controversies surrounding the methodology and reliability of these assessments.

• ESG Ratings and their significance in investment decisions
• The role of rating agencies and their methodologies
• Challenges and controversies related to ESG ratings, including transparency, bias, and greenwashing
• Potential solutions and recommendations for improving the effectiveness of ESG ratings
• Examples of ESG controversies in specific industries, such as fashion and automobiles

Zusammenfassung der Kapitel (Chapter Summaries)

The thesis begins by introducing the concepts of Socially Responsible Investment (SRI) and ESG investing. It explores the evolution of these concepts and their implications for investors.

Chapter 3 delves into the complexities of ESG ratings, discussing different types of ratings, the role of rating agencies, and the challenges associated with their use. It highlights the importance of standardization and the need for robust methodologies to ensure reliable assessments.

Chapter 4 specifically examines the application of ESG ratings in the context of investment decisions. It analyzes the differences between credit ratings and ESG ratings, explores various approaches employed by rating agencies, and examines the ongoing regulatory landscape for ESG. The chapter also sheds light on key challenges, including the potential for greenwashing and the need for greater transparency and independence in the rating process.

The thesis concludes by outlining a course of action for addressing these challenges. It proposes specific recommendations, such as stricter regulations, the development of standardized metrics, and the establishment of industry-specific standards for ESG assessments.

Schlüsselwörter (Keywords)

ESG ratings, Socially Responsible Investment (SRI), Environment, Social, and Governance (ESG), Rating agencies, greenwashing, transparency, bias, reliability, regulation, investment decisions, industry controversies, fashion industry, automobile industry.