Receiving more information can clarify the complex, but not when it comes to environmental, social, and governance (ESG) scores. A recent study shows that the more information a company discloses about its ESG practices, the more rating agencies disagree on how well that company is performing along these dimensions...
People are being sold on money being invested responsibly by using these ratings that nobody really understands, Siko
We find that after a country or stock exchange implements mandatory ESG disclosure requirements, the affected firms increase their ESG disclosures and experience greater ESG rating disagreement.
If they're being rated on their policies, then companies are just going to have lots of policies in place and disclose those policies, but I don't think the world will be a better place.
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