A firm's financial performance and ESG score are linked: ESGRisk.ai chief

As the globe battles climate change and its adverse effect on the sustainability of life and business on the planet, investors and lenders now also want to know a company’s performance on environmental, social and governance (ESG) factors besides financial ratings. This has turned ESG ratings into a new growth opportunity for rating agencies. Last year Acuite Ratings & Research launched ESGRisk.ai to provide ESG ratings to India’s top listed companies. Sankar Chakraborti chairman, ESGRisk.ai & group CEO, Acuité Ratings & Research tells Krishna Kant from Business Standard why ESG scores matter to investors.

Financial ratings and their implications are well understood but why should investors and other stakeholders also focus on ESG ratings of companies?

It has become increasingly