They can, for example, assess a company’s exposure to, and management of, ESG risks such as flooding, as well as ESG opportunities such as access to and use of clean technology. 

In 2020, it was found that 65% of institutional investors use ESG ratings at least once a week. This sits against a backdrop of a growing volume of assets under management incorporating ESG considerations (projected to exceed USD53 trillion by 2025, representing over a third of all global investments). ESG ratings can therefore significantly influence a company’s cost of capital, access to markets, reputation and stakeholder relations.