Lack of ESG Rating Transparency Limits Their Value, NBIM Says

Norway’s $1.5 trillion sovereign wealth fund warned that ratings companies may face steps by regulators unless they improve the transparency of their assessments of environment, social, and governance information.

A lack of transparency surrounding the ratings limits their value, and the companies that supply the scores should be more open about their design, methodology and where they source the data, Norges Bank Investment Management CEO Nicolai Tangen and Chief Governance and Compliance Officer Carine Smith Ihenacho wrote in an op-ed in Dagens Naeringsliv.

Uncertainty about how the ratings are composed and their comparability could also feed a backlash against ESG, ...