Roundtable Reflections:

2025 Inaugural ASU-HKU Interdisciplinary Conference-
ESG Index Development and Methodology

ESG indices and ratings have become essential tools in decision-making, yet the industry is currently mired in confusion. Discrepancies in results among different rating agencies obscure investors’ perspectives, creating more difficulties than conveniences for ESG investments. This inconsistency among diverse rating agencies also introduces uncertainty into the investment landscape.


To harness academic expertise and share cutting-edge research, our institute successfully hosted a panel discussion in the 2025 Inaugural ASU-HKU Interdisciplinary Conference on January 16-17. Alongside international leading scholars, we were delighted to have ESG index experts participate in the engaging discussion about these pressing issues. Let’s take a moment to reflect on the highlights of our dialogue!

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Issues Addressed
  • Why and how do ESG rating agencies use different methods for indicators and weights? What is the logic behind it?
  • Can ESG ratings serve as a guiding beacon for investors and corporates decision-making?
  • With discrepancies in company ESG scores raising market concerns, how should we cautiously interpret and use these ratings?
  • How can academia contribute to ESG ratings?
Key Takeaways
  • ESG indices and ratings should not be considered a “cure-all.” Different ESG rating agencies produce varying results based on their specific evaluation criteria and focuses. Users need to clearly define their objectives and understand the context when using ESG data.
  • Despite being quantitative, linking ESG indices to actual company valuations is complex. Several factors contribute to this, including the subjective nature of metrics, the lack of standardization in reporting, time lags before ESG initiatives impact financial performance, and a market tendency to prioritize short-term financial metrics over long-term ESG benefits.
  • Alternative data can offer fresh insights into key ESG indicators. Unlike traditional methods that extract extensive data from ESG reports, alternative data can capture critical ESG metrics more effectively by analyzing the relationship between negative news and investor behavior.
  • ESG indices and ratings continue to influence global financial markets. Despite the existing discrepancies, ESG financial products have been gradually adopted globally. These indices and ratings help enhance public understanding and promote ESG initiatives.
  • Concerns over rating divergence and methodology “black-boxes” in ESG data. Concerns about rating divergence and the opaque methodologies behind ESG data have led to scepticism in the market. This lack of transparency raises questions about the reliability of ESG ratings.
  • ESG data quality has room for improvement, especially when compared to financial data. Currently, ESG data often falls short in supporting key decision-making, highlighting the need for better standardization, structuring, and verifiability.
  • Collaboration between academia and industry holds great potential. By combining rigorous academic research with practical experience, feasible solutions can be developed for governments to implement ESG initiatives from a top-down perspective.
Closing Remarks

ESG progress and practices relies on the collaborative efforts of regulators, industry, and academia. We expect our academic conference as a platform, where we can not only learn about cutting-edge research from leading global scholars, but also actively engage in in-depth discussions with industry experts on key challenges.

For more insights about ESG index, please check out our commentaries on HKEJ: How Can Corporates Implement ESG Initiatives: A win-win for Society and Economy, and stay tuned for our upcoming ESG index seminars and reflections!

About the Events

Such impactful and dynamic academic event with top experts discussing key topics on Stakeholder, Society, and Governance, aims to foster idea exchange, facilitate multi-disciplinary research, and promote cross-pollination for impactful research on sustainability with the occasion.


Two fruitful days featuring keynote presentation from Franklin Allen, welcome remarks from Hongbin Cai, Amy Hillman, Roni Michaely, great presentations from our speakers and panelists, plus a bonus session where we announce our Institute’s best paper winners.


More academic conferences, events, seminars and workshops are on the way. Join and be part of us next time!

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