ESG ratings and non-listed companies: an empirical analysis of the construction sector

This dissertation has the goal to explore the possibility to create an ESG indicator for private companies, since up to now ESG ratings have been developed exclusively for listed companies. The first part of the thesis presents a literature review of the growing importance of sustainability for both companies and investors and an explanation of Environmental, Social and Governance factors. The second part analyzes in detail the main existing ESG assessment methodologies for listed companies. Finally, the last part is composed of the empirical analysis carried out on a sample of private firms belonging to the Italian construction sector. A score is assigned to companies based on the developed indicator, which considers the Unit Labour Cost (ULC) and the Labour Tax Avoidance (T_PTI). Subsequently, the 15 best companies and the 15 worst companies are assigned an ESG score following the Refinitiv methodology. The validity of the indicator developed is confirmed since the companies identified as the best on the basis of the indicator have high ESG scores and, conversely, the companies identified as the worst on the basis of the indicator have low ESG scores.