Are you aware of the fact that 85% of institutional investors have started considering ESG factors while making decisions, yet it is a matter of fact that only 25% have the access to reliable, accurate and actionable ESG data?

It is a matter of concern and also a dire need for more sophisticated, transparent and accurate key insights in the ESG landscape. ESG ratings can be of great advantage for organizations that are navigating their way through the complex terrain, especially if they partner up with top-leading companies like ICRA that can make all the difference. 

Beyond the numbers: what ESG ratings really tell you 

ESG ratings aren’t traditional metrics but they measure factors that have an impact on long-term stability of the companies. ESG standards also differ when it comes to regions. This means that a company which is operating in multiple countries can score differently depending on where it has been assessed. It is crucial for companies to understand these regional disparities that are looking for a way to align with global expectations. The complexities of ESG ratings can be difficult to understand which is why it requires expertise of top-leading companies like ICRA. ICRA plays a role in helping businesses navigate and decode the intricacies with in-depth analytics, industry-related evaluations thereby identifying areas that require improvement. 

What’s new in the ESG ratings sphere?

With ever-evolving changes in the financial ecosystem, ESG also undergoes transformations that are driven by latest advancements in technology. Let us look at some developments that can significantly make an impact on company’s ratings –

1. Dynamic ESG assessments – Traditional ESG ratings provide with a static picture of a company’s profile meanwhile dynamic ESG evaluations that are powered by AI are acting as a gamechanger in today’s world.

1. How exactly do they work – They analyze the data in real-time and with these assessments it becomes possible to provide with a much more accurate and real picture of a company’s ESG performance.
2. Why does it matter – This means that now investors will be able to identify risks and opportunities as and when they emerge and for the companies it provides them with an opportunity to present their issues proactively.

2. Scope 4 emissions – They are also known as avoided emissions and are emerging as a critical new metric.

1. What does it mean – This metric is used in quantifying the greenhouse gas reductions that are achieved through a company’s products and services.
2. Why it matters – By this companies get to showcase their environmental impact which is positive, further offering a more holistic picture of their sustainable position.

3. Blockchain for ESG transparency – Transparency has always been a challenge in the ratings sector. Now with blockchain technology this issue is being addressed through creation of immutable, auditable records of ESG data.

1. How it works – Blockchain is a way of ensuring that the data which is used to calculate ESG ratings is verifiable, accurate and tamper-proof.
2. Why it matters – Trust can be built in ESG ratings that holds transparency therefore make it much more reliable for decision making. 

The question is no longer whether to embrace ESG, but it is now how to do it more effectively for the growth of your business. ICRA expertise lets you leverage the tools, insights and support you need to make your way.