Citation:

Rupali S. Ambadkar, Kailas B. Kalsariya. "Evaluating Social Dimension of ESG Ratings: Evidence from Rating Agency Assessment and Corporate Disclosures in India" International Research Journal of Economics and Management Studies, Vol. 5, No. 4, pp. 123-127, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I4P115

Abstract:

Environmental, Social, and Governance (ESG) ratings have become an important factor to assess companies’ sustainability performance and help investors to make responsible investment decisions. Different ESG rating agencies assign different scores to the same companies because of their methodologies and evaluation criteria. The research aims to examine and compare the social dimensions assessments of major ESG rating agencies, including MSCI, Refinitiv, Sustainalytics, and CRISIL. The study is based on secondary data collected from ESG rating reports and the annual or sustainability reports of selected Indian listed companies for the financial year 2023-24. The research employs comparative and content analysis to review the indicators used to evaluate the social dimension and to examine whether companies’ disclosures are specific and transparent or generalized and lacking detail. The study finds notable variations in the social evaluation methods used by ESG rating agencies and highlights inconsistencies between ESG ratings and companies’ actual disclosures. Variations in ESG rating methodologies reduce comparability across social performance assessments and may create room for selective presentation of information, allowing firms to highlight favourable aspects of their social performance while providing limited detail on weaker areas, thereby complicating the ability of stakeholders, including investors, analysts, and regulators, to identify potential social washing. These variations may increase the risk of social washing and highlight the need for more transparency and standardised ESG reporting practices.

References:

[1] Becchetti, L., Bobbio, E., Prizia, F., & Semplici, L. (2022). Going deeper into the S of ESG: A relational approach to the definition of social responsibility. Sustainability, 14(15), 9668.
[2] Bissoondoyal-Bheenick, E., Bennett, S., Lehnherr, R., & Zhong, A. (2024). ESG rating disagreement: Implications and aggregation approaches. International Review of Economics and Finance, 96, 103532.
[3] Clement, A., Robinot, E., & Trespeuch, L. (2022). Improving ESG scores with sustainability concepts. Sustainability, 14(20), 13154.
[4] Maleki Vishkaei, B., Spahiu, E., & De Giovanni, P. (2025). Prioritizing, integrating, and communicating sustainability to prevent social washing. Cleaner Production Letters, 9, 100114.
[5] Mittal, A., Mittal, A., Dalal, N., & Thukral, S. (2025). Comparative analysis of environmental, social, and governance (ESG) ratings with a focus on environmental performance among banks and NBFCs: Insights from CRISIL ESG scoring. International Journal of Environmental Sciences, 11(1).
[6] Oehler, A., & Neuss, C. (2025). ESG disclosure vs. ESG ratings: Consistent information value? International Review of Financial Analysis, 107, 104623.
[7] Priya, M., Muralidharan, R., & Seshadri, S. (2024). Interrogation of ESG rating and benchmarking processes (EC Working Paper No. 02). The Energy Consortium, Indian Institute of Technology Madras.
[8] Senadheera, S. S., Withana, P. A., Dissanayake, P. D., Sarkar, B., Chopra, S. S., Rhee, J. H., & Ok, Y. S. (2021). Scoring environment pillar in environmental, social and governance (ESG) assessment. Sustainable Environment, 7(1), 1960097.
[9] Zhang, Y. (2025). Comparison of the Current Status of ESG Rating Systems. In SHS Web of Conferences (Vol. 225, p. 03001). EDP Sciences.

Keywords:

Corporate Disclosures, ESG Rating Agencies, Social Dimension, Social Washing, Sustainability Reporting.