Author Date

2025-03-14

Degree Name

Department

Management

College

Marriott School of Management

Defense Date

2025-03-14

Publication Date

2025-03-18

First Faculty Advisor

Ben Lewis

First Faculty Reader

David Bryce

Honors Coordinator

Mark Hansen

Keywords

ESGs, ESGs ratings, corporate social responsibility, aggregation, difference-in-differences

Abstract

Environmental, Social, and Governance (ESG) ratings are used to evaluate corporate social responsibility performance for years. This review is looking to see if ESG ratings’ “do any good” meaning have an impact beyond the financials. This review investigates the impacts and effects of ESG ratings by evaluating literature based on the level of aggregation used in each study as aggregation can hide differences in the data. I evaluated these papers and sorted them based on a theoretical framework into four distinct positions based on the level of aggregation used for the ESG rating and the dependent variable. I also looked at the type of research methodology in the papers. My observations found that aggregation levels alone cannot determine ESG rating effectiveness, but it does have an effect. Aggregation impacts granularity of results and disaggregated research has clearer more nuanced results. Aggregation levels can help solve the problem of standardization of ESG ratings. Additionally, methods of difference-in-difference allow for stronger and casual conclusions.