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Cross-dispersion bias-adjusted ESG rankingsProf. Jean-Charles Garibal - Grenoble School of Management
Date:
Friday, Feb. 3, 2023
12:00 PM—1:00 PMLocation:
online
Friday, Feb. 3, 2023
12:00 PM—1:00 PMLocation:
online
Cross-dispersion bias-adjusted ESG rankingsProf. Jean-Charles Garibal - Grenoble School of Management
We study the formation of ESG scores and rankings. In particular, we investigate the impact of aggregation rules when combining information on firms across categories, notably the E, S and G categories, into single ESG scores. Usual aggregation rules may bias scores toward the most dispersed category. We suggest a correction for this dispersion bias. We apply this correction to scores provided by two of the main score providers: Refinitiv and Bloomberg. We also provide simulation evidence. We show that the cross-dispersion bias may have a significant impact on ESG scores formation and that our proposed adjustment tends to weather it.
Department of Mathematics & Statistics
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Address
Texas Tech University, 1108 Memorial Circle, Lubbock, TX 79409-1042 -
Phone
806.742.2566 -
Email
math.dept@ttu.edu