Investors use information from SRI ratings agencies in a number of different ways:
- some use ratings as the full ‘ethical’ basis for fund inclusion;
- others ignore the rating but refer to the underlying information to develop their own conclusions;
- some use them for basic coverage of non-core holdings.
In recent years, there has been a general trend within larger investors away from reliance on ratings agencies and towards in-house research and the use of broker research. Agency research is generally not regarded as useful for ‘integrated analysis’.
