GLOSSARY
ESG rating
An ESG rating is a score or ranking — such as A, Gold, or Platinum — that agencies like KCGS, EcoVadis, or MSCI assign to a company's environmental, social, and governance performance based on public information and submitted materials, following each agency's own methodology. Because methodologies and scales differ between agencies, the same company can receive different ratings from different raters.
Why it matters for Tier-2/3
Most ESG ratings primarily target large listed companies, but as those companies work to improve their rating, the resulting push for stronger supplier management flows down through the chain. A Tier-2/3 supplier doesn't need a rating of its own, but understanding the structure of the criteria a customer cares about makes it easier to see the context behind a request.
Related
Informational only — this does not replace an official ESG evaluation. Independent content; not affiliated with or endorsed by any framework organization.