Amid increased scrutiny of ESG ratings, investors are increasingly looking beyond headline scores to the underlying data behind them, a new report by the ERM Sustainability Institute suggests.
The 2026 Investor Edition of ERM’s Rate The Raters report explores how investment professionals are relying on ESG ratings, sustainability data and other sources of information when making investment decisions.
‘The ESG data and investment landscape has experienced considerable turbulence since the ERM Sustainability Institute last examined investor perspectives on ESG ratings in 2023,’ it notes. ‘Surging sustainable finance regulation, increasing mandatory corporate disclosure, and direct oversight of ESG ratings providers have intensified scrutiny.’
Core findings
ERM’s latest report identifies four key findings. Firstly, while ESG ratings remain relevant, top-level scores are no longer the leading source of information for investment decisions and are increasingly treated as ‘one input among many’.
Secondly, the report suggests that investors prefer to access the underlying data behind the ratings, using it to support proprietary research and investment analysis.
Thirdly, investors are becoming more selective about the ratings providers they rely on, weighing factors such as data integration, price, coverage, and topic-specific expertise.
Lastly, the report suggests that investors have become more critical of ESG ratings, with average perceptions of their quality, usefulness and trustworthiness declining since 2023.
For ratings providers, the report identifies data integration, coverage and specialist expertise as relevant considerations in meeting investor needs. For firms reporting on sustainability, the research points to the importance of understanding the data and methodologies used by different ratings providers. Read more here.
