MIT Sloan Sustainability Initiative

The Aggregate Confusion Project

"If businesses, consumers, governments, and investors want to make decisions based on ESG, we need to provide them with unified guidance. This is the purpose of the Aggregate Confusion Project." - Professor Roberto Rigobon

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Capital markets are moving fast to incorporate Environmental, Social, and Governance factors.

The problem? ESG data are noisy and unreliable.

We found the correlation among prominent agencies’ ESG ratings was on average 0.61; by comparison, credit ratings from Moody’s and Standard & Poor’s are correlated at 0.92. This ambiguity around ESG ratings creates acute challenges for investors trying to achieve both financial and social return. 

With our five member companies, the Sustainability Initiative is working to solve this problem through a program of research to improve the quality of ESG measurement and decision making in the financial sector.


We have begun to characterize these problems in our latest research papers

  1.  “Aggregate Confusion: The Divergence of ESG Ratings”. | Written by: Florian Berg, Julian Kolbel, Roberto Rigobon.

  2. Is History Repeating Itself? The (Un)Predictable Past of ESG Ratings  | Written by: Florian Berg, Kornelia Fabisik, Zacharias Sautner. 

  3. ESG Confusion and Stock Returns: Tackling the Problem of noise. | Written by: Florian Berg, Julian Kolbel, Anna Pavlova, Roberto Rigobon.

Together, we are ready to chart a new course towards more rigorous and coherent methods for ESG integration.

Florian Berg | Research Fellow
ESG rating is still a young field, and the definition of sustainability is by nature a fluid one. What’s important today might not be important tomorrow.
Aggregate Confusion Project Scope

Each member organization will have slightly different business objectives, internal capabilities for ESG research, and priorities among ESG issue areas; but broadly we understand there to be a few tasks common to all:

  • Reduce the level of noise in measuring specific ESG categories such as labor treatment, carbon emissions, and product safety;

  • Understand the effect of ESG-driven investment flows on stock price and firm behavior;

  • Develop smarter ways to aggregate ESG factors into composite indices; 

  • Reliably assess investor preferences to enable ESG indices to be more customized and attuned to investors’ values.

Building a sustainable investment capability inside your firm is a process of engaging people and building their skills and knowledge. Our intention is that our members will have access to top researchers, and the opportunity to engage with our entire team and suite of activities to build their firm’s capacity.

For more information, please contact us 

Project Team

Roberto Rigobon

Roberto Rigobon

Economics, Finance and Accounting

Society of Sloan Fellows Professor of Management

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Florian Berg

Florian Berg

Research Fellow

Julian Kölbel

Julian Kölbel

Co-Founder, Research Affiliate

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Jason Jay

Jason Jay

Senior Lecturer, Director, Sustainability Initiative, PhD '05

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Nadia Madden

Nadia Madden

Sustainability Research Projects Coordinator

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Aggregate Confusion News and Media

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