NUS study: ESG assessments overlook forest loss

Environmental sustainability researchers at NUS found that widely used Environmental, Social and Governance (ESG) ratings often fail to reflect companies’ actual exposure to deforestation, highlighting the need to integrate satellite-based environmental data into sustainable investing frameworks. Published in the Proceedings of the National Academy of Sciences of the United States of America (PNAS) on 14 September 2026 , the study was led by Associate Professor L. Roman Carrasco from the Department of Biological Sciences , and conducted in partnership with Research Fellow Ms Yingtong Zhu, and Professor Johan Sulaeman from the NUS Sustainable and Green Finance Institute . The team investigated whether major ESG rating systems reflect companies’ actual deforestation exposure. Many investors today seek to direct their money towards companies that are responsible stewards of the environment and society. Companies are therefore given ESG ratings, which are meant to indicate whether a business is environmentally and socially responsible. These ratings increasingly influence investment decisions worldwide, but it remains unclear whether they accurately capture one of the biggest environme