Can Regulatory Intervention Save the Sustainability Rating Industry?

Abstract

Relatively speaking, the so-called sustainability rating industry has been witnessing rapid growth since the Financial Crisis. More recently, the industry is continually reorganising through a series of mergers and acquisitions. However, recent research has slowly turned away from what the sustainability rating industry can do, and moved towards what the investor base wants from them. In this direction, the findings are becoming particularly clear. The concept of a ‘mainstream’ investor base, and its growing tolerance of sustainability as a concept, is leading towards to a defining point. That defining point is whether the sustainable-related service marketplace is suitable for the mainstream marketplace. By utilising recent research into this junction, the article will consider both whether the industry can meet the needs of the marketplace as it continues to grow, and also whether any regulatory intervention could assist with the achieving of this hypothesised goal.