ESG Ratings and Rankings: Their Significance for Companies and the Regions of Their Presence

Abstract

The vast natural resources of the Russian Federation make the development of extractive industries inevitable. The scale of production is growing, and the load on ecosystems is increasing. It is important to take into account that non-renewable resources are extracted, which leads to a violation of the ecological balance. Therefore, the focus of many researchers is the concept of “sustainable development”, aimed at achieving a balance between the economy, nature and people. As this movement gains momentum, investors are increasingly demanding financial instruments that contribute to the formation of a more sustainable economy, as well as reducing potential risks associated with climate change and social problems. Capital providers implement the principles of sustainable financing by evaluating investments according to ESG criteria before making a decision on investment or financing. The development of the concept of sustainable development has led to the creation of so-called ESG ratings and ESG rankings. This article discusses their importance for companies and regions of their presence. The concept of sustainable development of the Arctic territories is introduced into the topic, as well as the methods and materials used in the research are described. The main part of the article is devoted to the problems of ESG ratings, their relationship with green financing, as well as information support for these ratings. An overview of existing ESG ratings of companies and regions is given, as well as some problems that arise when using ESG ratings and rankings. These issues are becoming more and more relevant in connection with the industrial development of the Arctic territories. The author concludes that industrial activity in the Arctic should be carried out only by socially responsible companies with a high ESG rating. However, when rating according to ESG criteria, quite a lot of questions arise, such as: selection of indicators, information support of ratings, rating scale and other issues. Therefore, currently an important scientific aspect is the creation of methodological generally accepted approaches to ESG ratings and rankings.