In partnership for the goals? The level of agreement between SDG ratings

Tobias Bauckloh, Juris Dobrick, André Höck, Sebastian Utz and Marcus Wagner

Journal of Economic Behavior & Organization, 2024, vol. 217, issue C, 664-678

Abstract: This study analyzes the level of agreement of Sustainable Development Goal (SDG) ratings across five different rating providers. It documents a low level of agreement that is particularly pronounced for companies from the Energy, Healthcare, and Basic Materials sectors. Moreover, the low level of agreement is mostly driven by some individual SDGs. When analyzing implications, we find different return characteristics and risk factor exposures of portfolios sorted according to SDG ratings of different rating providers. Overall, our analyses show that current SDG ratings fail to provide a clear signal of companies’ contribution to the SDGs which can have severe consequences for sustainability transitions and their financing.

Keywords: Sustainable development goals; Disagreement; Portfolio management; Ratings (search for similar items in EconPapers)
JEL-codes: C5 G1 Q5 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:217:y:2024:i:c:p:664-678

DOI: 10.1016/j.jebo.2023.11.014

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