ESG ratings must be fixed before events overtake them

The UK government has made its first move towards regulating ESG ratings - launching a consultation last week on transparency and measures to mend trust in the market. It's about time, but the decision-makers must be careful not to make things worse with ill-applied legislation. Comparisons to the global financial crisis have become fashionable in this time of banking turmoil. Dominant ESG ratings, however, have always had parallels of their own. In 2008, the market was flooded by mortgage-backed security ratings. They had little to show in terms of methodology. Nothing in terms of th...