Rating the Raters: Move to Streamline Sustainability Assessments
Wednesday, 15th January 2014 at 8:40 am
A new sustainability watchdog has released the core principles to be used to accredit the rating systems evaluating corporate performance worldwide.
The US-based Global Initiative for Sustainability Ratings (GISR) will not rate companies on sustainability measures, but will instead accredit sustainability ratings, rankings or indices that meet certain standards of excellence for assessing corporate sustainability performance.
Currently, more than 100 rating systems are evaluating the ESG performance of more than 10,000 companies using more than 400 issues and 2,000 indicators.
GISR is a global Not for Profit initiative that aims to accelerate the integration of environmental, social and governance (ESG) issues and indicators into global financial markets and investment decision-making.
Business sustainability Not for Profit Ceres and sustainability research and policy organisation the Tellus Institute drove the development of the GISR, beginning in 2011, to further harmonise and expand the global market for high quality sustainability ratings, rankings and indices in collaboration with the sustainability ratings community, NGOs, investors and companies.
The release follows a year-long consultation process that included input from corporate giants Aviva, Deutsche Bank, Bloomberg L.P., BBVA, TIAA-CREF and UBS who are members of GISR’s core committees; and AMD, UPS, Vale, Disney, Bosch and Bayer who are members of GISR’s technical working group.
GISR Founder Allen White said the number of investor, company and NGO participants in various GISR activities had doubled over the past 12 months, a trend that he expected to continue in 2014.
“The hundreds of comments received on the draft principles provide additional evidence of GISR’s growing worldwide profile,” he said.
“GISR is seeking to highlight leading groups doing an excellent job of rating corporate sustainability performance, while encouraging all raters to achieve a continuously higher level of excellence.
“That doesn’t mean there’s only one credible way to measure sustainability performance, but it does mean that credible systems should rest on certain common principles.
“Once they know which ratings systems align with such principles, we anticipate a major expansion of the ratings market worldwide.”
The full GISR accreditation scheme remains under development.