GoTo Group has received a better ESG risk rating than its competitors, Sea Ltd. and Grab, scoring 17 compared to their scores of 22.9 and 23.9, respectively. In the Software & Services category, GoTo ranks 196th among 1,094 companies, while in the overall sector, it is at 2,961 out of 16,009. This rating reflects GoTo’s low risk status, which may impact its attractiveness to investors. A recent joint report underscores the financial benefits of maintaining low ESG risk positions.
According to the latest ESG risk ratings from Morningstar Sustainalytics, GoTo Group, Indonesia’s leading digital ecosystem, has been rated higher than its competitors, Sea Ltd. and Grab, in terms of environmental, social, and governance (ESG) risks. With a score of 17, GoTo falls into the low risk category, whereas Sea Ltd. and Grab are categorized as medium risk, with scores of 22.9 and 23.9, respectively. In the Software & Services sector, GoTo holds the 196th position out of 1,094 companies assessed, whereas Sea Ltd. and Grab rank at 619th and 732nd, respectively. GoTo’s ESG rating is also superior in a broader context; it ranks 2,961 out of 16,009 global companies across all sectors, while Sea Ltd. and Grab are positioned at 6,658 and 7,395. Morningstar Sustainalytics designated GoTo as a ‘Core’ company, assessing it against 30 management indicators to determine its low risk classification. In contrast, Sea Ltd. and Grab are classified as ‘Comprehensive’ companies, based on their market capitalization size. Morningstar’s methodology allows for the accurate comparison of both classifications. A report conducted by Morningstar Sustainalytics and Natixis Investment Managers Solutions, published in August 2024, illustrates that portfolios with lower ESG risk tend to exhibit enhanced raw and risk-adjusted returns compared to those with higher ESG risks. Additionally, such portfolios demonstrate a more robust capacity to endure market fluctuations and financial crises. The research emphasizes that minimizing ESG risk can lead to improved performance and risk management due to associated benefits such as lower volatility, increased valuation certainty, stronger economic positioning, and better financial health, ultimately resulting in higher valuations.
The article discusses the ESG (environmental, social, and governance) risk ratings released by Morningstar Sustainalytics, a respected agency in this field. These ratings provide insights into companies’ exposure to ESG-related risks that could adversely affect their financial performance. The significant findings reveal how Indonesian company GoTo outperformed its competitors by achieving a lower ESG risk rating, which is crucial as it can impact investor perceptions, attract investments, and reflect corporate responsibility towards sustainable practices. The article also highlights the importance of ESG ratings in evaluating long-term financial stability and growth potential.
In summary, GoTo Group has emerged with a superior ESG risk rating compared to its rivals Sea Ltd. and Grab, indicating a lower perceived risk profile. This assessment not only illustrates GoTo’s commitment to sustainable practices but also emphasizes the potential advantages of lower ESG risk in achieving better financial performance. Given the increasing focus on sustainable investing, this competitive edge may foster investor confidence in GoTo’s long-term prospects.
Original Source: www.thejakartapost.com
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