Abstract

Reliability of ESG ratings, which represent a tool for organizations’ sustainability performance assessment, has been studied and sometimes questioned by academic researchers and international organizations. In response to criticism, regulations emerged targeting the revealed problems and their sources. Russia, where the ESG ratings market has grown significantly over the last two years, is no exception.

The paper aims at assessing the transparency level of ESG ratings methodologies in the Russian market and identifying whether they converge.

To achieve the goal, the author scrutinized publications of foreign and Russian authors, international organizations, and the Central Bank of Russia, analyzed the methodologies of the leading Russian ESG ratings, developed and applied the method to assess the transparency level of such methodologies using ten indicators.

The paper provides a brief overview of the key problems inherent in ESG ratings and highlighted in the literature, as well as the way they are addressed by regulation initiatives in a number of foreign countries and in the Russian Federation. In order to verify the implementation of the recommendations of the Central Bank of Russia in the updated ratings methodologies, an analysis of the approaches of four agencies (the Analytical Credit Rating Agency (ACRA), Expert RA, RAEX, and the National Rating Agency) was carried out in terms of transparency and convergence; the agencies’ methodologies were assigned points relative to a specific transparency level.

 The conclusion made is that there is some convergence of assessment approaches, primarily in terms of rating scales and weighting of ESG components, and there is a high level of transparency in methodologies of the Russian ESG ratings.