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Why ESG ratings desperately need fixing

Confusion over ratings is helping no one, and can easily be solved with three simple steps

By

Daniel Klier

The distance between the real purpose and the actual understanding of ESG ratings in their current form is widening at a time when inflows into the ESG investment market are booming
The distance between the real purpose and the actual understanding of ESG ratings in their current form is widening at a time when inflows into the ESG investment market are booming Photo: Getty Images

Daniel Klier is HSBC's former global head of sustainability and chief executive of sustainability data and technology provider ESG Book

It doesn’t require an industry insider to recognise that Republican descriptions of ESG investing as a “perversion” and a “cancer” in the run-up to the recent US midterm elections were an overstatement.

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