Leveraging ESG Data from Multiple Providers in Equity and Credit Markets

Arik Ben Dor, Jingling Guan, Xiaming Zeng

2023 | Practitioner | ESG Ratings, Fixed Income

The authors find that ESG dispersions among providers can predict future returns in both stocks and corporate bonds even after controlling for the average ESG level and other systematic risk drivers. Their results suggest that investors would benefit from incorporating ESG rating dispersion in addition to the level of ESG rankings into their investment process.