Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

Arjun Chemicals Ltd is preparing for an ESG rating. The rating provider says it will rely largely on the company's publicly disclosed BRSR data and also request additional information through a questionnaire. Which is the most accurate observation about the quality of the resulting rating?

The rating's quality depends on the completeness and accuracy of the underlying data. Where BRSR or questionnaire inputs are incomplete or inconsistent, the score can be distorted, which is why companies should ensure disclosures are accurate, comparable and consistently reported.

  1. AThe rating will be fully reliable because disclosed data is always audited
  2. BThe rating quality depends on the completeness and accuracy of the data, so weak or inconsistent disclosures can distort the scoreCorrect
  3. CThe rating is unaffected by disclosures because providers use only market prices
  4. DThe rating cannot be influenced by any data, as it is based only on the provider's opinion of the promoters

Explanation

ESG ratings are data driven, so incomplete, inconsistent or unverified disclosures reduce reliability and can distort the score. Not all disclosed data is assured, so option A is wrong. Ratings are not based on market prices or promoter opinion.

Did you get it right without looking?

One question tells you little. A timed set on Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators shows your real accuracy, how long you take and where you lose marks.

Practise Sustainability Audit, ESG Rating and Emerging Mandates from Government and RegulatorsFree diagnostic mock

More Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators questions