ABSTRACT
This chapter describes three biases in the quality of ESG ratings: size, geographical location, and sectoral. Size bias suggests that larger companies receive higher ESG ratings. Geographical location bias is related to the variance in ESG ratings in particular regions. Differentiation in ESG ratings between sectors and subsectors is observed in sectoral biases. This chapter discusses the reasons for each bias in this situation. It also presents the impact of time related with moment of changes regulations on quality of ESG ratings. It has been presented the analysis of the previous studies about the mentioned topic. It underlined the impact of the scope of disclosure on the quality of ESG ratings. Most significant trends in the quality of ESG measures are presented.
