11 September 2012 – Over the last decade there has been extraordinary growth in the number of ratings, rankings and awards that seek to measure corporate sustainability performance. Just this week, the Dow Jones Sustainability Index (DJSI), Newsweek Green Rankings and others will announce how corporations have performed in their 2012 rankings of the world’s most sustainable companies. With the growing number of ratings, companies struggle to keep track and every year invest more time and effort into responding to raters’ requests for information with little clarity on how ratings and rankings are being used by sustainability professionals and investors, or indeed if they are being used at all.
As part of SustainAbility’s Rate the Raters research initiative, which examines the true value of sustainability ratings, rankings and indices and the challenges associated with them, GlobeScan has contributed to a fifth phase of the initiative: a survey of 850 sustainability experts across 70 countries, on issues such as whether particular ratings are credible and why.
The survey reveals that many ratings are not widely recognised, even among those working in the sustainability field, and some ratings that are recognised suffer from significant credibility problems. Perhaps most concerning of all is that ratings aren’t used that often, and when they are it is mainly just for information: ratings rarely influence actions, including investment decisions.
With influencers like Jeremy Grantham and Warren Buffet increasingly talking about issues relating to resource scarcity, shifting demographics and climate change, it’s likely that even mainstream investors will start looking for ways to assess the ‘future resilience’ of global companies. Sustainability ratings could play a key role here, but our research suggests that the agenda needs to evolve rapidly for this to happen.
For deeper insight on the full survey results, please watch the video below, and join the debate by sharing your views on Twitter using the hashtag #RatetheRaters.
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About Rate the Raters
Since 2010 SustainAbility has sought to shed light on the growing universe of corporate sustainability ratings and to influence and improve their quality and transparency. In the fourth (and what they original planned as the final phase), they put forward a vision for ratings in the future, which called for competition on analysis rather than data collection, greater focus on material issues and impacts on improved transparency. SustainAbility embarked upon a fifth phase of their work earlier this year, as they felt compelled to help actualize their visions. This fifth phase involved a sustainability experts survey, which was fielded by long time SustainAbility partner GlobeScan. This phase was launched in an effort to answer a number of important, unanswered questions SustainAbility believed remain, for example, around how ratings are being used by sustainability professionals and investors.
Over the next few months SustainAbility will be shedding further light on how sustainability ratings are used and will publish:
- the results of the interviews with nearly 30 companies that are using and getting value from ratings
- the results of a survey of and interviews with mainstream investors on how they perceive and use ratings and sustainability information more broadly
- disclosure of raters’ responses to the questionnaire with an accompanying view on the current ratings agenda.
For the latest Rate the Raters news, visit: www.SustainAbility.com/Rate-the-Raters
For 25 years, GlobeScan has helped clients measure and build value-generating relationships with their stakeholders. Uniquely placed at the nexus of reputation, brand and sustainability, we partner with clients to build trust, drive engagement and inspire innovation within, around and beyond their organizations.
For more information, visit www.GlobeScan.com
SustainAbility is a think-tank and strategic advisory firm working to inspire transformative business leadership on the sustainability agenda. Established in 1987, SustainAbility delivers illuminating foresight and actionable insight on sustainable development trends and issues.
For more information, visit www.SustainAbility.com