Weekly Radar #264 - The Wild West of ESG Ratings, $3B In Climate Damage in the Middle of the Pacific, & Repurposing a Decommissioned Oil Rig
THIS WEEK'S RADAR COVERS:
- Possible solutions to the ambiguity of ESG ratings.
- An update on the expected damage caused by the wildfires in Maui.
- How a scuba resort in Malaysia emerged from an oil rig.
EDITOR'S CORNER:
Blueprint is this week, and we're looking forward to seeing many of you there...I will be at the REACH / Second Century Ventures booth when not in meetings, so please come by and say hi. -Drew Meyers
CLIMATE
The Wild West of ESG Ratings
BY: Logan Nagel
S&P Global, Moody’s, Sustainalytics, and Refinitiv…with so many different ESG ratings, interpreting what a given score actually means is a challenge–especially when the same rating means different things, as the Wall Street Journal recently reported. ESG ambiguity in the property industry is real with companies, portfolios, and properties all having their own profiles.
An emphasis on consistent ESG standards is hitting both sides of the Atlantic, bringing risk and opportunity. Not all rating systems are going to survive, meaning property firms that spend too much time and effort getting rated and certified by the Betamaxes of the ESG world might be in for a lot of duplicate effort. On the other hand, consultants and tech firms betting on the right horses will gain first mover advantage as the field consolidates.
If it stays fractured, the ranking diversity will allow rater specialization on top of a standardized framework. Two opportunities: individually addressing the E, S, and G and investors layering multiple rating systems to form a more complete picture of firm-level ESG performance, as asset manager Amundi does. If these things happen, expect a savvy ESG data player to build a multi-rater ESG performance matrix for the entire property industry.
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