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S&P Global rates GoTo’s ESG scores higher than Grab, Sea Group
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The credit rating agency's logo appears on the fronticepiece of the S&P Global headquarters in the financial district of New York City on Dec. 13, 2018. (Reuters/Brendan McDermid)
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nternational rating agency S&P Global Ratings has given a fairly high environmental, social, and governance (ESG) rating score for Indonesian technology group PT GoTo Gojek Tokopedia Tbk (GOTO).
Based on the official statement that was updated on Oct. 8, 2024, S&P Global rated GoTo 44 out of 100 (44/100). The score, which was developed by S&P Global to assess the ESG performance of global companies, is within the range of global companies such as Google parent company Alphabet Inc, which received a score of 47/100.
In comparison, GoTo's closest competitors Grab Holdings Limited received a lower score of 28/100, while Shopee's parent company Sea Limited was rated at 21/100. Meta Platform, the parent company of Whatsapp, Facebook and Instagram, also received a lower score of 30/100.
The ratings agency revealed this ESG score to measure the extent to which a company's performance and risk management, opportunities, and ESG impacts are material to the environment and society.
The S&P Global ESG Score measures a company’s performance on and management of material ESG risks, opportunities, and impacts informed by
As quoted on Tuesday by its official statement, the assessment is based on “a combination of company disclosures, media and stakeholder analysis, modeling approaches, and in-depth company engagement via the S&P Global Corporate Sustainability Assessment (CSA).”
As a CSA survey respondent, GoTo's ESG score was based on the company’s answers to the questionnaire assessment and methodology in the CSA, plus public information and modeling approaches.
According to S&P, part of the "Big Three" along with Moody's Ratings and Fitch Ratings, all companies are assessed using CSA which is divided into two categories: companies that participate in CSA and those that do not.
The ESG scores of companies that participate in answering the CSA assessment are based on responses to CSA, public information and modeling approaches. These include GoTo, Grab, Alibaba and Alphabet.
Meanwhile, the ESG scores of companies that do not participate in CSA are only based on public information and modeling approaches. Sea Ltd is among the companies that do not participate in CSA.
Assessment criteria
S&P Global selects the most relevant criteria within each sustainability dimension based on their weight in the assessment and their current or expected significance to the industry.
In detail, this scoring is part of a broader evaluation of how well companies manage risks and opportunities related to sustainability issues, such as climate change, labor practices, corporate governance and others.
With nine assessment criteria, GoTo scored the highest in the waste & pollutants category with a score of 69/95, exceeding the industry average (mean) of 24/100. In addition, the company’s human capital management score of 49/100 exceeded the industry average of 30/100.
In the climate strategy category, GoTo scored 89/100, followed by 54/99 in packaging, 51/100 in risk & crisis management, 35/100 in labor practices, and 30/100 in customer relations.
S&P’s ESG assessment allows investors to compare companies in the same sector, often used by investors who combine ESG factors in their investment decisions to identify companies that are leaders in sustainability and those that may face higher ESG risks.
A previous research by the sustainability-focused Morningstar Sustainalytics recorded GoTo's ESG risk rating in the low risk category with a score of 17. The same research found Grab and Sea to be in the medium risk category with scores of 23.9 and 22.9 respectively. Morningstar Sustainalytics categorizes ESG risk ratings into five risk levels, starting from negligible (0-10), low (10-20), medium (20-30), high (30-40), to severe (more than 40).
