Do sustainability standards improve the information environment? Evidence from the influence of SASB standards on disagreement among ESG rating agencies

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🔬研究者:Shows that ESG rating disagreement increases post-SASB, driven by weighting differences, challenging the assumption that standards improve consistency.

🏢実務担当者:ESG rating agencies and corporate reporters should be aware that adopting SASB standards may not reduce rating divergence unless accompanied by quantitative metrics and clear weighting guidance.

🏛政策担当者:Regulators (SEC, EU) should consider that standard-setting alone may not improve the information environment; additional guidance on interpretation and weighting may be necessary.

Purpose This study aims to examine whether sustainability standards can improve the information environment for investors and information intermediaries. Specifically, the authors use the disagreement among ESG rating agencies to assess whether industry-based SASB sustainability standards – recognized as a “source of guidance” by the ISSB – are associated with higher or lower quality ESG information. Design/methodology/approach The authors use a difference-in-difference design based on the staggered release of provisional SASB industry-specific standards between 2012 and 2016 and conduct statistical analysis. Findings The authors find that ESG disagreement among the rating agencies increases following the introduction of SASB standards, which is contrary to the expectation that SASB standards can create a common norm and lead to ratings convergence. Further, the authors find that the increase in disagreement is due mainly to disagreement in the weights assigned to different dimensions rather than disagreement in the topics or measures that the raters consider when computing their scores. Finally, the authors show that the post-SASB increase in ESG disagreement is more pronounced when it is more difficult to quantify ESG performance. Research limitations/implications The study sheds light on how sustainability reporting standards affect the information environment. Focusing on the SASB standards and ESG rating providers, the authors provide timely evidence given concerns about the meaning and usefulness of ESG ratings from the SEC and the EU. Practical implications The findings suggest that sustainability standards may not necessarily improve the information environment for investors and, potentially, could lead to greater disagreement in how investors interpret information based on sustainability standards. However, the results also suggest that the design of sustainability standards matters, for example, in industries where more disclosure topics or more quantitative metrics are included, the sustainability standards can reduce ESG disagreement to some extent. The findings can inform investors, information intermediaries, standard setters and regulators. Moreover, given that SASB standards have been integrated into the ISSB framework, the study offers timely evidence to inform the ISSB’s ongoing efforts. Originality/value To the best of the authors’ knowledge, this is the first study to examine the impact of SASB standards on disagreement in ESG rating agencies. The findings reveal that while standardization aims to improve consistency, it does not necessarily reduce divergence in ESG scores. In particular, the authors show that standardization alone may not resolve interpretive divergence, which often stems from differences in weighting. To address this, standard setters could provide clearer guidance on how ESG dimensions should be interpreted or prioritized, incorporate more quantitative and industry-specific metrics, expand disclosure topic coverage and focus more on industries with low consensus on ESG issues. The findings are of value to standard setters such as ISSB and SASB, and regulators.

• openaire https://doi.org/10.1108/medar-08-2024-2600first seen 2026-05-14 22:23:27