The ESG rating assesses companies in terms of their sustainability. The three areas of environment (environmental), social and governance are taken into account.
The rating is carried out by agencies and produces a result on the scale from AAA (top grade) to C. Since industries are not comparable with each other, companies are rated relative to other companies in the industry.
Different agencies weight the criteria differently, which is why there are variations in the ratings.
ALSO has in the past criticized the lack of uniform standards in ESG valuation. The rating is highly dependent on the agency that performs it. In view of the great influence that the rating has on the stock exchange and competition, ratings urgently need to gain in uniformity, comparability and respectability.