It's very high level and sparse .. even then the only references to emissions reductions (including carbon) were pretty much: "company must adhere to laws and regulations and must take into account the future emissions reductions that are governmental targets" (paraphrasing).'
I don't see how this is different from what I said. It does not rate how environmentally friendly the company is, it rates whether the company is in compliance with current and it has plans future regulations.
Edit: there is carbon emissions section that is helpfully labelled as one of the things that "CAN be tracked". So this seems to be optional and also the benchmark seems to be self determined by the company rated.
Page 5, Exhibit 2 is PwC's ESG framework. It includes carbon emissions. The criteria used by each ESG ratings agency differs. The major agencies are MSCI, Sustainalytics, Bloomberg, FTSE Russell, ISS Ratings and Rankings, CDP Climate, Water and Forest Scores, S&P Global ESG Score, and Moody’s ESG Solutions Group. All of them include carbon emissions in their Environmental score. For example, this is the methodology used by the largest ESG ratings agency, MSCI: https://www.msci.com/documents/1296102/34424357/MSCI+ESG+Rat.... You might need to register to gain access but it should be free. Continue reading the document and you will quickly realise that the score is not about how the world impacts the company, it is about how the company impacts the world. I understand that ESG has been sold to businesses on the premise that higher ESG scores might improve profitability, but that is an ancillary benefit. The purpose of the score is for marketing. That is, "our business is awesome because we have a high ESG score! Ignore all of the evil things we do!"
MSCI ESG Ratings aim to measure a company’s resilience to long-term,
financially relevant ESG risks.
- Of the negative externalities that companies in an industry generate, which issues
may turn into unanticipated costs for companies in the medium to long term?
- Conversely, which ESG issues affecting an industry may turn into opportunities for
companies in the medium to long term?
It does not care much about what the company actions do to the world.