Do ESG Rating Agencies Improve ESG Performance? (Bikmetova & Pirinsky 2025) | FT50 JBE

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🎙️🌍 Welcome to another episode of Revise and Resubmit — the podcast where bold research meets the real world, one paper at a time. 📚💥

Today, we're not just talking numbers or theory — we're talking impact. Environmental. Social. Governance. Yes, ESG — the three letters that are shaking up boardrooms, investor calls, and activist rallies alike. 🏢📈🌱

But here’s the question: Do ESG rating agencies actually change anything... or are they just really good at watching from the sidelines? 🧐📊

In today’s spotlight, we unpack the brilliantly titled paper:
👉 "Do ESG Rating Agencies Improve ESG Performance?"
by researchers Natalya Bikmetova and Christo A. Pirinsky — a fresh study just published on 15 July 2025 in the FT50-listed Journal of Business Ethics, brought to us by none other than Springer Nature. 🎓🌐✨

Using data from the likes of MSCI KLD, Refinitiv, Sustainalytics, and Bloomberg, this paper dives deep into what really happens when ESG agencies start tracking a firm. The result?
🔻 Toxic emissions fall.
📉 Government enforcement actions drop.
📢 ESG disclosure rises.
💼 And institutional investors come running — especially those that care about ESG.

It’s not just watchful eyes. It’s watchful eyes that move the needle. 🔍➡️📈

This isn’t just research — this is a peek into the machinery that may be reshaping capitalism from the inside out. So now we ask:

🤔 Are ESG rating agencies silent judges... or undercover change agents?
Can more scrutiny lead to more sustainability?

🙏 A huge thanks to the authors for this powerful contribution, and to Springer Nature for publishing it in the highly respected FT50-listed Journal of Business Ethics.

If you found this episode enlightening (or even just a little bit provocative), be sure to hit that Subscribe button on Spotify 🎧, check us out on YouTube at Weekend Researcher 🎥, and don’t forget — we’re also on Amazon Prime and Apple Podcasts 🍏📲.

Because this is Revise and Resubmit... and we’re just getting started. 💬🔁

So here's the curious question to leave you with:
🌿 If a company changes its ways only after someone starts watching... is that real responsibility—or just good PR? 💼👁️‍🗨️

Let’s dig in.👇

Reference

Bikmetova, N., Pirinsky, C.A. Do ESG Rating Agencies Improve ESG Performance?. J Bus Ethics (2025). https://doi.org/10.1007/s10551-025-06063-0

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