Lack of transparency at ESG rating agencies

The Financial Reporting Council (FRC) has published research into the role of proxy advisors and ESG ratings agencies on investors

It found that while almost all investors use proxy advisors, around 75% would rather voting research was based on their own in-house voting policies rather than the advisor’s standard policies.

Proxy advisors provide research and advice to shareholders and their intermediaries, including recommendations on how to vote at the annual general meetings of listed companies.

However, due to limited resources, most investors will issue voting instructions based on recommendations from advisors.

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