“ESG Risk Analytics” of YGP Group starts analyzing and ranking pure EHS regulatory risk of over 1 million companies quantitatively on a real-time basis. If you have a quick view on due diligence of a target company, your supplier, your subsidiaries or your own, ESG Risk Analytics will address your interest in 10 minutes.
China has appeared as the country with the highest ESG/EHS legal risk with the risk score of 834,542.8. Pursuant to Global ESG Risk Rating Service of YGP, the number and speed of EHS/ESG legislation and development in China has been significant over recent years (as of September 2017, around 3,600 EHS/ESG legislation). More importantly, transparency and non-systematic legal enforcement has increased the country’s EHS/ESG risk at the much higher level. On the positive side, still it indicates that China recognizes EHS/ESG as one of the main legal agenda and works hard on the issue to mitigate its EHS challenges. Russia appeared the second country in the risk ranking with the risk score of 608,324.5. Russia has similar condition like China, but the recognition and policy and legislative initiatives on EHS/ESG appeared lower than China.
European Union is No. 3 with the risk score of 466,677.2 (almost half risk score of China). In case of European Union, the result can be interpreted in two ways. EU has been the leader of EHS/ESG for long years, and this has resulted in large volume of EHS/ESG legislation. Destiny of Leader. On the other hand, it may also be interpreted that EU companies may bear (much) higher EHS/ESG compliance cost than other companies in the world. There is no objection that environmental regulation may bring innovation and, accordingly, increase competitiveness, as EU companies are also leaders in environmental technologies.
South Korea is an interesting case (No. 6 with the risk score of 303,846.5). In recent years, what may appear in the country has been “regulatory competition”, i.e., more policy and legislative initiatives to control among government ministries. Compromised transparency also multiplied the EHS/ESG risk of the country. On the positive side, the country has continuous regulatory reform process to bring efficiency in law. As a good example, Denmark is ranked No. 87 (Risk Score: 59,981.9). A lower rank does not mean that the country has a weak EHS/ESG legislation. However, regulatory and administrative efficiency with high transparency and systematic enforcement reduces EHS/ESG risk of companies, as companies know what to expect in the EHS area.
No. 12 – United States (Risk score of 257,501.4). The country’s strong legal liability culture did not lower its ranking although EHS legislative initiatives have been significantly reduced under the present administration.
Corporate ESG Risk Rating of YGP is the real-time risk identification and rating database for 178 countries (and 8,000 companies in the world).