ESG Market Analysis

By: Safiyyah Abdul Hamid

Project: With the rapid growth in the interest in ESG reporting, Oxfam is working to strengthen ESG measures, particularly as they relate to the social and human rights metrics. This past fall, Oxfam worked with Cornell researchers to conduct a literature review on ESG data providers and their ratings, as well as the main critiques or shortcomings with each. In particular, they focused on how a select number of extractive industry (EI) companies (and specific projects they undertake; more about Oxfam’s Extractive Industries is here). They examined how these companies/projects are assessed by the main ESG data providers, and identified gaps between how companies score on the metrics, how those scores change over time, and how companies are performing in terms of ESG in practice. Results suggest existing ESG metrics applicable to extractive industry companies inadequately account for the negative social and environmental impacts on local communities. The SGE Intensive team will build on this research and make recommendations for how best to improve these ratings to better reflect company performance. Oxfam is particularly interested in what actions regulators like the Securities and Exchange Commission (SEC) and standards‐setting bodies like the Sustainable Accounting Standards Board (SASB) can take in order to improve ratings and corporate disclosure.