African companies often feel frustrated by ESG ratings that seem arbitrary or unfair. Understanding how rating methodologies work—and their built-in biases—is the first step toward improving scores and accessing lower-cost capital.
Article Summary: ESG Ratings
- This article pulls back the curtain on ESG rating agencies, explaining exactly how they assess companies and what African firms can do to improve scores.
- It breaks down the methodologies of major raters:
- MSCI, Sustainalytics, Refinitiv, Bloomberg, and ISS.
- The piece explains why African companies often score lower than peers in developed markets (hint: it’s often about disclosure rather than performance), and provides strategies for closing the rating gap.
- Special sections cover how to prepare for ESG assessments, which data points matter most, and how to engage with rating agencies to correct inaccuracies.
- The article includes case studies of African companies that significantly improved ratings, discusses the link between ESG scores and cost of capital, and addresses controversies around rating agency biases.
Target Audience:
CFOs, investor relations officers, sustainability directors, board members, capital markets participants
