You are absolutely correct, the perspective I have is quite narrow due to my lack of experience in the field. However, I hope this none-the-less help shed some light on the current ongoing projects and thoughts around the field. Moreover, I do realise the perspective on the post is very Euro-environment centric. I do not have expertise or experience in other markets to comment on them.
Thanks for reading Larry,
Your assessment is generally correct, however just one more thing. In ESG ratings, we also take into consideration industry clusters so that companies are ranked against their peers as much as possible. Additionally, in order to have more dimensions, we not only use company self disclosure data but also watch for controversial news, lawsuits.
This means that which data to use and how to normalise or "curve" they grade it on is in the discretion of the industry experts within each ESG rating company.
Of course, at the end of the day, funds hold multiple industries. Which means that they eventually get aggregated so lose some of that granularity.