Corporate ESG ratings have fallen from first to seventh place as a source of information for investment decisions, according to ERM's "Rate the Raters 2026" survey of 53 investment professionals representing an estimated $23.5 trillion in assets under management.

In-house research and direct engagement with companies now occupy the number one and two positions, followed by corporate sustainability reports. The shift marks the first time ratings have lost the top spot since ERM began tracking the question; the prior investor survey ran in 2023.

Trust in the ratings themselves has also slipped. Investors scored their trust that ESG ratings accurately judge a company's sustainability performance at 3.05 out of five, down from 3.31 in 2023.

What does the ranking shift mean for the data market?

The change is one of emphasis rather than abandonment. More than half of investors — 51 percent, down slightly from 57 percent in 2023 — said ESG ratings provide information material to investment performance. The proportion agreeing that ratings are a credible source of information on corporate ESG performance actually rose, to 44 percent from 37 percent.

Use remains frequent. 58 percent of investors reported using ESG ratings products at least once per week, including 36 percent who use them multiple times per week. Both figures have declined from 2023, when 69 percent reported weekly use.

Notably, investors now use ratings mainly as raw material for their own work. The top reported use of ratings and underlying data is as a basis for in-house research on corporate ESG performance, followed by as a basis for engagement with companies.

Ratings, in short, have become an input rather than an answer.

Who gained and who lost among providers?

Among individual providers, MSCI jumped to the top spot in perceived quality from seventh place in 2023, and it was the only provider to see its quality score increase. CDP, EcoVadis and S&P Global followed.

MSCI and EcoVadis also climbed to first and second in perceived usefulness, rising from fifth and seventh respectively.

What comes next for the ratings business?

A significant majority — 62 percent — of investors said they expect mandatory sustainability disclosures to increase their use of ESG data in the next few years. That expectation places the survey's findings within a regulatory frame: as disclosure regimes tighten, demand for data may grow even as confidence in scores weakens.

Asked to rank preferred changes to make ratings more useful, investors put a greater focus on relevant and material issues first, followed by better linkage to company performance and improved quality and disclosure of methodology.

Aiste Brackley, Director of the ERM Sustainability Institute, said: "Our research points to a growing sophistication in how investors evaluate and use ESG information, placing ratings providers under increasing scrutiny. More than half of investors surveyed said ESG ratings provide information that is material to investment performance. ESG data is becoming increasingly embedded in mainstream investment processes, including research, portfolio construction, risk management, and benchmarking."

The survey covered investors across North America, EMEA, Asia Pacific and Latin America.

The verdict: providers that fail to fix methodology transparency and materiality will keep sliding down the usefulness table, whatever mandatory disclosure does to demand.