Despite growing interest in corporate sustainability ratings, too few of them are meeting the needs of their stakeholders – this according to phase two of SustainAbility’s Rate the Raters.
Rate the Raters is a four-phase research program in which SustainAbility is working to better understand the universe of corporate sustainability ratings and to influence and improve the quality and transparency of such ratings. In the first phase of research SustainAbility explored the evolution of the ratings agenda over the last decade and identified key trends and challenges in the ratings space. SustainAbility, in phase two, has inventoried over 100 ratings and their attributes, surveyed a global group of sustainability experts on their perceptions of ratings, and analyzed the results.
The key findings include:
- The Only Constant is Change: Of the 108 ratings in the inventory, only 21 existed in 2000, which suggests that, of the ratings most prominent today, the vast majority have emerged within the last ten years.
- One Size Does Not Fit All: The “universal” rating – one which spans multiple issues, industries and / or regions – remains the norm. For example, 88% of the ratings in the inventory assess companies across more than one sector. It is difficult or impossible, however, to make meaningful comparisons across industries because issues manifest themselves differently (in terms of level of importance) for each industry.
- Responsiveness Trumps Performance: More than 60% of the ratings in the inventory depend wholly or in part on information submitted directly to ratings organizations, thereby rewarding companies with the greatest capacity to respond to ratings requests rather than those with the best performance.
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