It’s Time to Give Companies Standalone Climate Ratings
Document Type
Article
Publication Date
5-2022
Journal Title
Harvard Business Review
ISSN
0017-8012
Abstract
Investors are increasingly using ESG ratings for their investment decisions. But we need to assign companies a stand-alone rating focused on climate risk that’s distinct from the ESG rating system. Such a climate-specific rating can distill complex information regarding a company’s carbon footprint and climate risk into an intuitive, user-friendly format, while avoiding the flaws that currently mar ESG ratings. The “super-wicked” problem of climate change is so urgent and far reaching that it deserves its own rating, one that eschews the methodological complexities and legal challenges of melding together E and S and G. A climate-specific “C-rating” would empower investors and c-suites alike to make the climate-conscious choices that markets are telling us they want.
Publisher
Harvard Business Publishing
Recommended Citation
Felix Mormann & Milica Mormann,
It’s Time to Give Companies Standalone Climate Ratings,
Harv. Bus. Rev.
(2022).
Available at:
https://scholarship.law.tamu.edu/facscholar/1813