ESG RatingsThis dissertation investigates the impact, practices, and regulation of ESG (Environmental, Social, and Governance) rating agencies in modern-day sustainable finance with a specific focus on the European economy. The exponential growth of ESG assets and financial products has shifted sustainability from an ethical issue to a driving force in financial analysis and risk management. Within this context, ESG rating agencies offer a structured assessment of firms’ risk and rewards related to sustainability that serves to shape capital allocation and corporate actions. However, substantial heterogeneity in methodology leads to challenges related to comparability, transparency, and trustworthiness. The research reconstructs the historical evolution of ESG criteria, from traditional sustainable investing behaviour to the implementation in mainstream financial markets, bolstered by international agreements such as the Paris Agreement and the Sustainable Development Goals.