Several months after the US government began investigating an Abbott Laboratories baby-formula plant for its connection to the deaths of at least two infants, the world’s most influential judge of corporate environmental, social and governance practices upgraded the company.
MSCI Inc., whose scoring system directs an estimated 60% of retail investments in ESG funds, raised Abbott’s rating on Aug. 25 one notch to A from BB. MSCI cited corporate governance improvements for the upgrade, as well as a broad changes to the way it rates companies that benefited larger health care firms, including Abbott.
The rating upgrade offers another example of how ESG ratings can diverge significantly from a firm's real-world track record on product safety, climate change, or other issues that pose real risks to investors.
