ERM research reveals sharp drop in investor confidence in quality of data offered by ESG ratings providers

ERM research reveals sharp drop in investor confidence in quality of data offered by ESG ratings providers

08 October 2026

Investors are increasingly critical of the quality of data provided by ESG ratings firms, according to new research from the world's largest sustainability consultancy, ERM. When compared with 2023, there has been a significant decline in perceptions of quality across most major ratings providers.

Twelve of the 13 assessed ratings providers saw their quality scores decline, while the top-rated provider's score dropped from 4.2 to 3.5 on a five-point scale.

The latest edition of ERM Sustainability Institute's Rate the Ratersresearch - which has been tracking the sustainability ratings and rankings market since 2010 - provides a view on the current state of the market from investors representing an estimated $23.5 trillion in assets under management.

Despite declining perceptions of quality, the research reveals that investors continue to view ESG ratings as an important input into investment decision-making. More than half of polled investors said that they use ESG ratings because they provide information that is material to investment performance.

Aiste Brackley, Director of the ERM Sustainability Institute, commented on the findings:

"Our research points to a growing sophistication in how investors evaluate and use ESG information, placing ratings providers under increasing scrutiny. More than half of investors surveyed said ESG ratings provide information that is material to investment performance. ESG data is becoming increasingly embedded in mainstream investment processes, including research, portfolio construction, risk management, and benchmarking.

As ESG considerations become more closely linked to fiduciary responsibilities, expectations for data quality and transparency continue to rise. Tolerance for errors, inconsistencies, and data gaps is declining. In response, investors are increasingly complementing ESG ratings with proprietary analysis and direct company engagement, seeking deeper insights and more comprehensive datasets to support investment decisions."

Countering the broader trend, MSCI emerged as a clear top choice for investors - topping the rankings for familiarity, quality and usefulness. MSCI was the only ratings provider whose perceived quality increased since 2023, moving into first place from seventh in the previous rankings. Research interviews with investors highlighted MSCI's speed in launching relevant new products into the market on key topics including climate, human rights and biodiversity, as well as its broader integration into portfolio workflows.

ENDS

NOTES TO EDITOR

Survey background and methodology

ERM's Rate the Raters has been tracking and assessing sustainability ratings and rankings since 2010. Through a series of reports, the program was designed to better understand the ESG rating landscape and provide perspectives to help companies, investors, and other stakeholders make sense of and derive more value from ESG ratings.

The 2026 investor findings are based on a survey fielded between February and July 2026, which generated responses from 53 investment professionals from organizations that collectively represent around $23.5 trillion in assets under management.

The survey insights were further informed by 10 in-depth interviews with a subset of surveyed investors and other industry leaders. The report is a companion to the 2025 corporate edition of Rate the Raters, which was based on responses from 386 corporate sustainability professionals from 39 countries.

About the ERM Sustainability Institute 

The Sustainability Institute is ERM's primary platform for thought leadership. The purpose of the Institute is to define, accelerate, and scale sustainability performance by developing actionable insight for business. We provide an independent and authoritative voice to decode complexities. The Institute identifies innovative solutions to global sustainability challenges built on ERM's experience, expertise, and commitment to transformational change. 

About ERM

Sustainability is our business. 

As the world's largest sustainability consultancy, ERM combines integrated expertise and implementation capabilities, powered by AI and technology, to help clients turn sustainability into measurable business value.

With more than 50 years of experience, ERM's diverse team of 8000+ experts in 40 countries and territories helps clients create innovative solutions to their sustainability challenges, unlocking commercial opportunities that meet the needs of today while preserving opportunity for future generations. Learn more here.