Measuring the level and risk of corporate responsibility - An empirical comparison of different ESG rating approaches

This article empirically compares different rating approaches of corporate social performance (CSP) using environmental, social and corporate governance (ESG) scores of three important sustainability rating providers. We both comment on the ESG level and the risk of changes in a company's ESG level. These ratings are highly relevant to managers and investors comprising ESG issues into their decision-making process. Furthermore, a number of empirical studies, focused on corporate social responsibility topics, are based on certain ESG scoring approaches. The data set includes ESG data for more than 8500 companies worldwide. The article suggests an evident lack in the convergence of ESG measurement concepts. The different ratings neither coincide in distribution nor in risk. Therefore, all CSP stakeholders are encouraged to critically evaluate the validity of the particular ESG scoring model.