Quality of Sustainability Reporting: the relationship with ESG Rating

Abstract

The objective of this thesis is to investigate the relationships between the quality of sustainability reports and ESG ratings, in order to identify the determinants that affect a ESG rating agency’s assessment. In this regard, the research question guiding this thesis is: how does the quality of the sustainability report influence the ESG assessment by rating agencies? To this end, a set of quality indicators of sustainability reports are identified from literature and widely used sustainability reporting standards. To create a dataset, these indicators are applied to the 2021 sustainability reports of a sample of companies included in the STOXX EUROPE 600 index. Subsequently, it is assessed whether the quality of the sustainability reports has an impact on firms’ ESG ratings, to understand whether an high-quality sustainability report prompts positive ESG ratings.