An environmental, social, and governance rating that overlooks the imminent likelihood of bankruptcy is worthless. 

The electric vehicle maker, Fisker, Inc. declared bankruptcy last week, representing the loss of roughly a billion dollars of investor capital. Yet only a month ago, Sustainalytics gave Fisker a “Medium Risk” ESG rating, the same as Tesla, and suggested that Fisker was average for its industry. Sustainalytics seemed to miss the most important sustainability issue of all: the sustainability of the company itself.