Published Online:July 2026
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG030726
DOI:10.71329/IUPJCG/2026.25.3.46-64
Author Name:Apoorva Danesh Muttur and A N Tamragundi
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:46-64
The study presents a comprehensive comparison of global and Indian ESG rating methodologies, examining how variations in data sources, scoring logic, and materiality perspectives influence the reliability and comparability of ESG assessments. A qualitative and comparative approach was adopted using secondary data from methodology documents, regulatory disclosures, and academic literature. The study analyzes major global agencies: Refinitiv (LSEG), MSCI, Sustainalytics, Bloomberg, S&P Global, and FTSE Russell; and Indian agencies including CRISIL, ICRA, and CARE Ratings. Six analytical dimensions were assessed: pillar structure, data orientation, weighting and normalization, controversy handling, materiality focus, and disclosure dependence. Significant methodological divergence is evident. Global agencies such as MSCI and Sustainalytics emphasize risk-based and financial materiality approaches, while Refinitiv and Bloomberg prioritize transparency and disclosure quality. Indian agencies, aligned with SEBI’s Business Responsibility and Sustainability Report (BRSR), adopt sector-specific, compliance-based frameworks, reflecting domestic regulatory priorities. Differences in market maturity, data availability, and investor expectations limit cross-market comparability. The study underscores the need for greater transparency and selective harmonization of ESG methodologies to enhance reliability and investor confidence.
Over the past few years, the growing emphasis on sustainability and responsible investing has made environmental, social, and governance (ESG) metrics a central component of financial decision-making. Beyond financial indicators, non-financial dimensions, such as environmental stewardship, social responsibility, and corporate governance, collectively termed ESG, have become integral to corporate valuation, investor decision-making, and policy discourse (Eccles et al., 2020). ESG performance is now generally regarded as a proxy for long-term sustainability, ethical responsibility, and resilience to non-financial risks (Sullivan & Mackenzie, 2021). As investors increasingly demand transparent sustainability disclosures, ESG rating agencies have emerged as critical intermediaries, translating qualitative sustainability information into quantitative, comparable scores (Avetisyan & Hockerts, 2017).