ESG, which stands for Environmental, Social and Governance, is a set of standards measuring a business’s impact on society, the environment, and how transparent and accountable it is.
In recent years, ESG has become a key measure of corporate sustainability and long-term resilience. Once a niche concern, it now drives decisions by investors, regulators, and consumers alike, from carbon emissions to board diversity. Yet as ESG becomes more mainstream, many companies are asking: Is an ESG certification easy to get?
What Is ESG Certification—and Why Does It Matter?
ESG certification refers to third-party validation of a company’s ESG practices. Unlike internal sustainability reports or ESG ratings from analytics providers, the certification process typically involves an independent review of how well a company meets specific, predefined criteria. In a crowded field of “green” claims, such certification potentially signals credibility, helping companies earn stakeholder trust and reduce reputational risk.
Originally championed by socially responsible investors and civil society organizations, ESG has since become a mainstream priority. According to PwC’s Global Investor Survey 2023, 75% of institutional investors believe companies should report ESG data with the same rigor and consistency as corporate financial results. In other words, the pressure isn’t just to report ESG metrics, but to do so credibly.
A 2024 analysis revealed that 98% of S&P 500 companies reported ESG information in 2022. Notably, “70% of S&P 500 companies that reported ESG information in 2022 obtained assurance over certain of that information (up from 65% in 2021).” Thus, there is growing emphasis on verification, which in turn shows further commitment to transparency and investor trust. Clearly, ESG is no longer optional.
But here’s the challenge: ESG certification is not as simple as ticking a compliance box. In fact, there is no single, globally recognized certification and no universally accepted pathway. Instead, companies must typically navigate a fragmented landscape of frameworks, standards, and voluntary verification schemes that continue to evolve over time.
Why ESG Certification Isn’t Easy
Here are some key reasons why ESG certification can be challenging:
- No Universal Standard – ESG certifications vary widely. Companies often face an “alphabet soup” of overlapping frameworks (like GRI, SASB, CDP) that inform but do not necessarily equal certification.
- Regulatory Uncertainty – Particularly in the U.S., ESG policies differ across federal and state levels, making it difficult to align efforts with one clear rulebook.
- Greenwashing Scrutiny – Companies risk backlash if their ESG claims are seen as superficial or misleading. Certification adds credibility but understandably demands proof.
- Data and Disclosure Demands – Reliable ESG data is often difficult to collect, especially across complex supply chains. Verifying this data adds another layer of effort, time, and cost.
- Resource Requirements – Certification can require external auditors, in-house ESG expertise and use of technology platforms to collect and track data.
Frameworks and Standards: What’s the Difference?
To prepare for certification, companies often align with recognized ESG frameworks and standards—but these are not the same as certification. According to the Corporate Governance Institute:
- Frameworks provide guidance on what to report and how to structure ESG disclosures.
- Standards offer the technical rules on how to measure and report that information.
Popular ESG frameworks include:
- GRI (Global Reporting Initiative) – A stakeholder-focused framework for disclosing economic, environmental, and social impacts.
- UN PRI (Principles for Responsible Investment) – A voluntary framework helping institutional investors integrate ESG into decision-making.
- Integrated Reporting (IR) Framework – Promotes integration of ESG into financial reporting to show long-term value creation.
Meanwhile, leading ESG standards include:
- SASB (Sustainability Accounting Standards Board) – Offers sector-specific ESG metrics for financially material issues.
- ISSB (International Sustainability Standards Board) – Developed under the IFRS Foundation to create a global baseline for sustainability reporting.
- CDP (Carbon Disclosure Project) – A platform for environmental data disclosure on emissions, water, and deforestation.
These tools guide companies but don’t certify them. Instead, they lay the groundwork for companies pursuing certification.
ESG Ratings Are Not ESG Certification
Another source of confusion is the difference between ESG ratings and ESG certification. ESG ratings are independent assessments issued by providers like the MSCI, Sustainalytics, and S&P Global. They evaluate how companies manage ESG risks and opportunities, but are not formal validations.
Key ESG Rating Providers:
- MSCI ESG Ratings – Rates companies from CCC (laggard) to AAA (leader).
- Sustainalytics (a Morningstar company) – Measures unmanaged ESG risks, from negligible to severe.
- S&P Global ESG Scores – Focuses on disclosure and ESG performance.
- Moody’s ESG Solutions – Offers ESG scores and integrates ESG into credit ratings.
- Refinitiv ESG Scores (part of the London Stock Exchange Group) – Tracks ESG performance across 10 core themes.
- ISS ESG (Institutional Shareholder Services) – Provides ESG analytics and impact assessments.
However, ESG ratings come with a critical caveat: inconsistency. A 2022 MIT Sloan and University of Zurich study revealed that ESG ratings from different agencies often correlate poorly compared to a near-perfect alignment in traditional credit ratings. This finding means a company can potentially be rated an ESG leader by one provider and a laggard by another.
Despite their limitations, ESG ratings frequently appear in investor presentations and earnings calls. But unlike audited financial statements, ESG ratings aren’t regulated or independently verified. As the Harvard Law School Forum on Corporate Governance notes, the lack of standardization in ESG ratings risks confusing rather than guiding investors.
The U.S. Securities and Exchange Commission (SEC) has echoed similar concerns in its ESG Risk Alert and highlighted the need for consistent definitions and reliable methodologies. Further critiques have drawn parallels between ESG ratings and the unchecked power of credit ratings before the 2008 financial crisis. An article published in The Breakthrough Journal asks whether ESG is the future or simply a replay of that crisis. It further cautions that ESG frameworks may lack the transparency and accountability necessary to prevent systemic risk.
So What ESG Certifications Actually Exist?
While there’s no universal ESG certification, there are respected third-party programs that certify specific ESG elements within a company:
- B Corp Certification (by B Lab) – Assesses a company’s overall social and environmental impact. Requires a minimum score and public accountability.
- LEED Certification – Recognizes environmentally sustainable building practices.
- FSC Certification – Validates sustainable forestry practices and sourcing.
- Science Based Targets initiative (SBTi) – Verifies corporate emissions reduction plans in line with climate science.
Each program has its own criteria, verification processes, and renewal cycles. While valuable, these certifications typically cover individual themes (like carbon or governance), but not the full ESG spectrum.
The ESG Certification Journey: What It Takes
For companies that pursue ESG certification, the journey usually follows these steps:
- Materiality Assessment – Identify ESG issues most relevant to the business and stakeholders.
- Data Collection – Track reliable, verifiable ESG metrics.
- Framework Alignment – Map reporting to frameworks like GRI or CDP.
- Disclosure – Publish ESG or sustainability reports.
- Third-Party Engagement – Work with raters, auditors, or certifiers.
- Optional Certification – Apply for B Corp, SBTi, or other specialized programs.
- Continuous Improvement – Update practices regularly as ESG expectations evolve.
This is not a one-time process but an ongoing commitment to transparency and accountability. Recent research shows that strong ESG performance is increasingly linked to improved financial outcomes. Companies that integrate ESG considerations benefit from enhanced risk management, stronger stakeholder relationships, and improved access to capital. A 2023 McKinsey study found firms with higher ESG scores often experience greater long-term valuation, employee engagement, and brand trust. Thus, ESG plays a growing role in corporate resilience and competitiveness.
Final Thoughts: Is ESG Certification Easy to Get?
No—and that’s exactly why it matters.
ESG certification is not a checkbox exercise. It requires a clear strategy, reliable data, and a willingness to undergo scrutiny. While there is no universal seal of approval, companies that pursue certification signal a deeper commitment to responsible business practices.
As ESG moves further into the regulatory spotlight and investor priorities, the companies that stand out will be those that act early, disclose transparently, and engage in continuous improvement. In the current fragmented system, ESG certification remains a challenge, but also a powerful opportunity for companies ready to lead.
Tezcan Gecgil, PhD, has worked in investment management in the U.S. and U.K., including a Greenwich, Connecticut-based hedge fund as well as the American Stock Exchange, CFA Institute, and Bloomberg. She has also taught at various U.S. and U.K. universities.
She holds Ph.D. (Business Studies) as well as MSc (Investment Banking & Trading) and MBA degrees from leading U.S. and U.K. universities and has also completed all three levels of the Chartered Market Technician (CMT) examination.
Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. Publicly, she has also contributed to investing.com, InvestorPlace and the U.K. website of The Motley Fool.
When not navigating the markets, Tezcan delves into the mysteries of history and explores new destinations. Read Full Bio
