Scientific Beta

IPE: "One critic of ESG ratings is Frederic Ducoulombier, ESG director at Scientific Beta, who questions how much we can really know if we rely on companies to disclose data, which is the traditional model. “Companies have every incentive to behave strategically when producing non-financial information and havThe statistics validate his concern."

IPE, ETFS Guide 2020, October 2020

"(...) One critic of ESG ratings is Frederic Ducoulombier, ESG director at Scientific Beta, who questions how much we can really know if we rely on companies to disclose data, which is the traditional model. “Companies have every incentive to behave strategically when producing non-financial information and have all more leeway to do so if reporting is voluntary and information is not construed as financially material,” he says. The statistics validate his concern. According to a recent report from the Global Sustainable Investment Alliance, 59% of industry respondents were either “very” or “somewhat” dissatisfied with the level of climate-related disclosure from publicly traded companies. A worrying 87% of respondents believe that markets are not consistently or correctly pricing ESG risks into company and sector valuations. (...)"