Each episode we speak with an academic at the forefront of sustainable finance about an influential paper they’ve published and the questions that we’ve heard about it from practitioners.
Episode 1: MIT’s Roberto Rigobon on making sense of sustainability ratings
We sit down with Roberto Rigobon, Society of Sloan Fellows Professor of Management and a professor of applied economics at the MIT Sloan School of Management. “Aggregate Confusion: The Divergence of ESG Ratings,” the 2022 paper that he co-authored with colleagues Florian Berg and Julian Kölbel, ranks among our favorite papers because of its resonance with practitioners.
Professor Rigobon walks us through the drivers of divergence in sustainability ratings and shares his thinking about its significance for investors. He discusses the need for innovation and the importance of transparency, as well as a paper on sustainable investing that he would want on a desert island. We also get a peek into his thinking about why rating sustainability is less like rating creditworthiness and more like rating snacks.
Theory Meet Practice embodies our belief that unleashing the power of capital to do its best demands research that’s not only underpinned by analytical rigor but that also translates in practice. And that the highest impact research is research that investors can actually use to shape their strategies and allocate capital.
We hope you like it!