ERM’s latest assessment of the ESG rating landscape finds that corporate sustainability professionals continue to value and engage with ratings agencies but are taking a more selective approach based on stakeholder needs.

Rate the Raters, developed by ERM’s Sustainability Institute, finds that most (84 percent) companies plan to continue engagement with ESG ratings and see them as an important part of their sustainability strategy. However, more than three-quarters (77 percent) also emphasize the need for closer ratings methodology alignment with leading mandatory and voluntary sustainability standards.

Investor demand drives engagement

Investor demand remains the most important motivation for corporates engaging with ESG rating agencies. However, while 46 percent cite it as their top reason for engagement, this represents a decline from 2023 when 57 percent identified investor demand as the prime motivation. Meanwhile customer demand is rising sharply, with 23 percent of companies citing it as the most important driver (compared to 7 percent in 2023).

Number of ratings companies engage with drops

Most companies now actively engage with three to five ESG ratings. Engagement with six to 10 ratings has declined since 2023 and those companies responding to more than 10 has dropped by more than half. This trend reflects a more selective approach among corporate sustainability teams who are stretched thin by growing reporting and compliance responsibilities and need to prioritize.

Active raters top the rankings

The survey indicates that corporates continue to favor active raters for the quality and usefulness of their ESG ratings. S&P Global ESG and CDP rank first and second for quality, while EcoVadis jumped up the rankings to take third place for quality (up from fifth place in 2023) and first place for usefulness (up from seventh place in 2023). The EcoVadis advancement reflects the growing popularity of supply chain sustainability insights.

Outlook for ESG ratings

When asked what they would like to see happen in the next five years to ensure ESG ratings better serve companies, investors and other stakeholders, corporates place rater alignment with mandatory reporting standards at the top of their wish list, followed by greater consistency, comparability and disclosure across methodologies.  While the majority of survey participants expect to continue to respond to ESG ratings, almost half (46 percent) believe that the relevance of ESG ratings will decline over time.

Aiste Brackley, Partner at ERM and Director of ERM’s Sustainability Institute said: “Over the past few years, ESG rating agencies have demonstrated their ability to adapt to changing political, regulatory, and market conditions.

“However, as companies become more selective and strategic in their engagement, raters must respond with greater transparency, methodological rigor, and alignment to evolving regulatory standards. Investor demand for high-quality ratings data remains strong, and those raters that continue to evolve will be best positioned to support investors, companies, and other market participants in directing capital toward businesses that drive measurable sustainability and commercial impact.”

Notes to editors

Survey background and methodology

ERM’s Rate the Raters has been tracking and assessing sustainability ratings and rankings since 2010. Through a series of reports, the program was designed to better understand the ESG rating landscape and provide perspectives to help companies, investors, and other stakeholders make sense of and derive more value from ESG ratings.

The 2025 findings are based on a survey fielded between May and July 2025, which generated responses from 386 corporate sustainability professionals from 39 countries across a wide range of industries. The survey insights were further informed by in-depth interviews and feedback gathered on the consultation draft during Climate Week NYC in September 2025.

About the ERM Sustainability Institute 

The Sustainability Institute is ERM’s primary platform for thought leadership. The purpose of the Institute is to define, accelerate, and scale sustainability performance by developing actionable insight for business. We provide an independent and authoritative voice to decode complexities. The Institute identifies innovative solutions to global sustainability challenges built on ERM’s experience, expertise, and commitment to transformational change. 

About ERM

Sustainability is our business.

As the world’s largest specialist sustainability consultancy, ERM partners with clients to operationalize sustainability at pace and scale, deploying a unique combination of strategic transformation and technical delivery capabilities. This approach helps clients to accelerate the integration of sustainability at every level of their business.

With more than 50 years of experience, ERM’s diverse team of 8000+ experts in 40 countries and territories helps clients create innovative solutions to their sustainability challenges, unlocking commercial opportunities that meet the needs of today while preserving opportunity for future generations. Learn more here.