This paper examines ESG rating analysts' views from Sustainalytics in order to highlight the main ESG features discussed across 11 sectors. We perform a topic modeling and a sentiment analysis to identify the content of analysts' opinions on the companies' ESG performance and to uncover the embedded sentiment associated with each ESG feature. The results of the topic modeling consist of 13 topics with a sector driven distribution. The analysis suggests that the best ESG performing financial institutions show to be actively committed to the code of best practice in governance and disclosure transparency. Whereas penalized financial entities seem to manifest less attention to ethical conduct and mis-selling. Furthermore, data privacy and security attract analysts' attention and should be closely monitored by financial entities. Finally, it is important to actively disclose ESG activities as the more information is available the better ESG commitment is reflected in analysts' views.

ESG in the financial industry: What matters for rating analysts?

Mandas M.
Methodology
;
Lahmar O.
Writing – Original Draft Preparation
;
Piras L.
Writing – Review & Editing
;
De Lisa R.
Validation
2023-01-01

Abstract

This paper examines ESG rating analysts' views from Sustainalytics in order to highlight the main ESG features discussed across 11 sectors. We perform a topic modeling and a sentiment analysis to identify the content of analysts' opinions on the companies' ESG performance and to uncover the embedded sentiment associated with each ESG feature. The results of the topic modeling consist of 13 topics with a sector driven distribution. The analysis suggests that the best ESG performing financial institutions show to be actively committed to the code of best practice in governance and disclosure transparency. Whereas penalized financial entities seem to manifest less attention to ethical conduct and mis-selling. Furthermore, data privacy and security attract analysts' attention and should be closely monitored by financial entities. Finally, it is important to actively disclose ESG activities as the more information is available the better ESG commitment is reflected in analysts' views.
2023
ESG; ESG rating analyst; Rating Banking; Topic modelling; Textual analysis; Sentiment analysis
File in questo prodotto:
File Dimensione Formato  
1-s2.0-S027553192300171X-main.pdf

accesso aperto

Tipologia: versione editoriale
Dimensione 713.23 kB
Formato Adobe PDF
713.23 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11584/377403
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 4
  • ???jsp.display-item.citation.isi??? 3
social impact