ESG ratings have become a significant driver of capital allocation, with over $35 trillion in assets under management now incorporating ESG criteria. But the correlation between different rating agencies is surprisingly low — MSCI and Sustainalytics agree on company ratings only about 60% of the time.
The divergence stems from different methodologies: some agencies weight industry-specific material issues, others emphasise controversy exposure, and still others focus on management quality and forward-looking targets. A company rated “AAA” by MSCI might receive a medium-risk score from Sustainalytics.
For companies, this creates both confusion and opportunity. Understanding what each agency measures — and how your disclosure maps to their frameworks — is essential for managing your ESG profile proactively rather than reactively.
RSustain advises clients on ESG rating optimisation: identifying material gaps in disclosure, improving data quality and granularity, and ensuring that positive actions are communicated in formats that rating agencies can consume efficiently.
Importantly, rating optimisation is not about gaming the system. It is about ensuring that genuine sustainability performance is accurately reflected in external assessments. The best way to improve your ESG rating is to improve your ESG performance — and then disclose it clearly.