Assessment of industry specifics impact on the ESG rating among Russian companies

Abstract

Purpose: This paper examines the impact of industry-specific factors on Environmental, Social, and Governance (ESG) ratings among Russian companies. It aims to address the limitations of current ESG assessment methodologies by proposing a more accurate, sector-based weighting system for sustainability indicators.

Design/Methodology/Approach: The study employs a comparative and empirical analysis of ESG methodologies from major rating agencies (MSCI, Refinitiv, Expert RA, and Sustainalytics) and their application to Russian corporations. Data were collected through a survey and content analysis of public sustainability reports from 117 companies across multiple industries. A cross-sectoral evaluation was conducted to assess each firm’s exposure to sustainability risks and the degree of internal policy alignment with ESG principles. The study proposes an industry-adjusted matrix to assign proportional weights to ESG indicators.

Findings: The results reveal significant inconsistencies in ESG scoring due to methodological variations among rating providers. The correlation between ratings across agencies is weak, largely because the weighting of sustainability factors does not reflect sector-specific characteristics. For instance, high-tech and financial companies are primarily exposed to social and governance risks, while industrial, energy, and agricultural sectors face higher environmental exposure. The proposed weighted ESG matrix aligns sustainability indicators with sectoral realities, improving fairness and comparability across industries.

Practical Implications: The framework provides a basis for refining ESG evaluation methodologies and supports regulators such as the Bank of Russia in standardizing ESG assessments for better investment decisions.

Originality/Value: This study contributes an empirically grounded, industry-specific ESG weighting model, enhancing the precision and transparency of sustainability assessments.