CDP report unveils the crucial role of ESG ratings amid regulatory overhauls

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🗞️ Driving the news: A new CDP report reveals that 94% of investors rely on ESG ratings monthly, underscoring their growing significance
• However, inconsistencies in ESG data collection and methodologies across different regions present challenges, especially as regulatory frameworks evolve globally
• CDP is actively engaging with policymakers to standardize ESG practices and prevent regulatory fragmentation

🔭 The context: As countries like the UK, EU, and India implement voluntary and regulatory ESG codes, the divergence in approaches threatens to confuse market participants
• The report highlights how this lack of uniformity could hinder the transparency and trust essential for effective ESG governance

🌍 Why it matters for the planet: ESG ratings are crucial in directing capital towards sustainable business practices and investments aligned with climate goals, such as the Paris Agreement
• Effective, consistent ESG ratings can help companies reduce risks and seize opportunities in the green transition

⏭️ What's next: The European Union is set to finalize its ESG regulations by Fall 2024, while other jurisdictions are at varying stages of regulatory development
• A global push for more uniform ESG standards is expected to reduce market fragmentation

💬 One quote: "ESG ratings can assist companies and financial institutions in meeting mandatory disclosure requirements and directing investments towards sustainable objectives," the report notes

📈 One stat: 94% of investors use ESG ratings at least monthly, according to the CDP report

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