IDEAS home Printed from https://ideas.repec.org/a/wsi/jfmmix/v09y2021i02ns2282717x21500067.html
   My bibliography  Save this article

The Divergence Of Esg Ratings: An Analysis Of Italian Listed Companies

Author

Listed:
  • VINCENZO CAPIZZI

    (Dipartimento di Studi per l’Economia e l’Impresa, Università degli Studi del Piemonte Orientale, “Amedeo Avogadro†, Via E. Perrone 18, 28100 Novara, Italy)

  • ELEONORA GIOIA

    (School of Management, Politecnico di Milano, Via Lambruschini 4, 20156 Milano, Italy)

  • GIANCARLO GIUDICI

    (School of Management, Politecnico di Milano, Via Lambruschini 4, 20156 Milano, Italy)

  • FRANCESCA TENCA

    (School of Management, Politecnico di Milano, Via Lambruschini 4, 20156 Milano, Italy)

Abstract

The increasing attention to sustainability issues in finance has brought a proliferation of environmental, social, and governance (ESG) metrics and rating providers that results in divergences among the ESG ratings. Based on a sample of Italian listed firms, this paper investigates these divergences through a framework that decomposes ESG ratings into a value and a weight component at the pillar (i.e. E, S, and G) and category (i.e. sub-pillar) levels. We find that weights divergence and social and governance indicators are the main drivers of rating divergences. The research contributes to develop a new tool for analyzing ESG divergences and provides a number of recommendations for researchers and practitioners, stressing the need to understand what is really measured by the ESG rating agencies and the need for standardization and transparency of ESG measurement to favor a more homogeneous set of indicators.

Suggested Citation

  • Vincenzo Capizzi & Eleonora Gioia & Giancarlo Giudici & Francesca Tenca, 2021. "The Divergence Of Esg Ratings: An Analysis Of Italian Listed Companies," Journal of Financial Management, Markets and Institutions (JFMMI), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-21, December.
    • Handle: RePEc:wsi:jfmmix:v:09:y:2021:i:02:n:s2282717x21500067
    DOI: 10.1142/S2282717X21500067
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S2282717X21500067
    Download Restriction: Open Access
    File URL: https://libkey.io/10.1142/S2282717X21500067?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ann Susan Thomas & Ambili Jayachandran & Ajithakumari Vijayappan Nair Biju, 2024. "Strategic mapping of the environmental social governance landscape in finance – A bibliometric exploration through concepts and themes," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4428-4453, September.
    2. Jian Zhou & Xiaodong Lei & Jianglong Yu, 2024. "ESG rating divergence and corporate green innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 2911-2930, May.
    3. Wang, Xue & Liu, Qingyuan, 2024. "Information disclosure and ESG rating disagreement: Evidence from green bond issuance in China," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    4. Gianluca Gucciardi & Elisa Ossola & Lucia Parisio & Matteo Pelagatti, 2024. "Common factors behind companies' Environmental ratings," Working Papers 536, University of Milano-Bicocca, Department of Economics.
    5. Hasmik V. Khachatryan, 2022. "Divergence of ESG Ratings: Foreign Regulatory Trends," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 89-104, October.
    6. Paolo Maccarrone & Alessandro Illuzzi & Simone Inguanta, 2024. "Does a Change in the ESG Ratings Influence Firms’ Market Value? Evidence from an Event Study," JRFM, MDPI, vol. 17(8), pages 1-17, August.
    7. Fiorillo, Paolo & Meles, Antonio & Pellegrino, Luigi Raffaele & Verdoliva, Vincenzo, 2024. "Geopolitical risk and stock price crash risk: The mitigating role of ESG performance," International Review of Financial Analysis, Elsevier, vol. 91(C).
    8. Michele Rubino & Ilaria Mastrorocco & Giovanni Maria Garegnani, 2024. "The influence of market and institutional factors on ESG rating disagreement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3916-3926, September.
    9. Asif, Muhammad & Searcy, Cory & Castka, Pavel, 2023. "ESG and Industry 5.0: The role of technologies in enhancing ESG disclosure," Technological Forecasting and Social Change, Elsevier, vol. 195(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:jfmmix:v:09:y:2021:i:02:n:s2282717x21500067. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: https://www.worldscientific.com/worldscinet/jfmmi .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.