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A sustainable future requires us to look beyond the ESG rating

Scoring stocks for green and social factors is a good starting point — but it cannot provide the full picture

A sustainable future requires us to look beyond the ESG rating
Photo: Getty Images

Over the summer, fashion brands group Boohoo found itself at the centre of a scandal. The company’s share price dropped 42% over three days in early July when reports surfaced that its suppliers in Leicester were paying below minimum wage to garment-makers.

Yet the company was rated highly by many ESG rating agencies — an ESG rating aggregator, CSRHub, shows that Boohoo rates better than 70% of over 20,000 companies worldwide.

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