Environmental, social and governance (ESG) ratings are increasingly used by investors, lenders and regulators to assess the sustainability performance of companies. They can, for example, assess an entity’s exposure to, and management of, ESG risks such as flooding, as well as ESG opportunities such as access to and use of clean technology. They can also assess an entity’s impact on wider sustainability considerations, which might include the company’s impact on air quality due to its carbon emissions. In 2020, it was found that 65% of institutional investors use ESG ratings at least once a week.¹ This sits against a backdrop of a growing volume of assets under management incorporating ESG considerations (projected to exceed US$53 trillion by 2025, representing over a third of all global investments).² ESG ratings can therefore significantly influence a company’s cost of capital, access to markets, reputation and stakeholder relations.