A new MIT Sloan study finds that MSCI, the world's largest ESG ratings provider, suppresses rating changes through internal committee reviews, creating a "traffic light effect" that prioritizes stability over accuracy. Researchers reverse-engineered MSCI's scoring process from 2014 to 2022, covering roughly 16,000 companies annually, and discovered that scores pile up just below upgrade thresholds and just above downgrade thresholds, with only 24.3% of 129,702 firm-years that underwent committee reassessment resulting in a letter grade change. When downgrades were suppressed, affected stocks avoided an average 2.8% decline over the following year, representing $300 million to $400 million in avoided market-value loss for a $10 billion market-cap company. The study also exploited a 2020 methodology overhaul by a competing rater to confirm that MSCI's adjustments tracked peer ratings at the time, not rewritten historical scores, ruling out common fundamental drivers. Lead researcher Florian Berg cautioned that investors may be getting stability instead of timely signals, potentially impacting returns.