Abstract
Responsible investors require unbiased information on the outcomes of corporate social responsibility (CSR) activities to direct (withdraw) their capital toward those entities with positive (negative) impact. Companies, however, have clear incentives to manufacture a positive tilt into any CSR information they release. Third-party entities therefore launch corporate standards to reduce that tilt and mitigate any potential bias. Companies react to these initiatives by offering significant funding to these third parties, whereby they create a context of corporate capture in which some third-party executives may be indebted to these corporations rather than aligned with their original mission. To navigate this complex web of information asymmetries, external buy-side rating agencies offer supposedly unbiased views to responsible investors. In this context, we aim to inform the research questions: How good are these rating agencies? And how dependent is their existence on...