Rate the Raters attempts to better understand the universe of external sustainability ratings and to influence and improve the quality and transparency of such ratings.

Latest

Rate the Raters has currently entered Phase 5, a phase that will the see the release of four deliverables throughout the autumn. The third of these has been published and is available for download in the project library below:

Rate the Raters, Phase Five The Raters Response In the final piece of Rate the Raters Phase 5, we publish the responses from a number of sustainability raters.

Background

“Ratings agencies have extended their grip and lulled investors and institutions into a false sense of security.”
– John Gapper, Financial Times, April 28, 2010

There are a dizzying number and variety of external ratings, rankings, indices and awards that seek to measure corporate sustainability performance. Stakeholders of all kinds – investors, consumers, employees, etc. – are increasingly relying on these ratings to help inform their decisions (to invest, purchase, work, etc.). Companies also rely on such ratings to gauge and validate their own sustainability efforts, with some even linking management performance evaluation and compensation to external ratings. These ratings, therefore, must be robust, accurate and credible.

Yet, similar to how investors have been lulled into a false sense of security by credit ratings agencies (as John Gapper opines), users of sustainability ratings may be getting lulled into the same state. Serious questions remain about the role and credibility of ratings. Who are these raters and how do they go about their research? How do they define “sustainability?” How do they determine and compare material issues across sectors? How transparent are they in their approach? And are they truly driving companies and society towards a more just and sustainable world?

To answer these questions, SustainAbility has embarked upon the Rate the Raters research project. Click on the tabs on the left to see more detailed information on each phase of the project.

In the first phase of research we explored the evolution of the ratings agenda over the last decade, identifying key trends and challenges such as the difficulty in rating companies across sectors, the lack of focus on the economic leg of the triple bottom line and whether ratings are helping to drive us to a sustainable future.

For further information, including in-depth analysis of good practice and a description of the evaluation process, download the full white paper from the project library.

Rate the Raters Phase One Understanding the Universe of Corporate Sustainability Rankings

Taking Inventory of the Ratings Universe

Ratings are being taken more seriously as they go mainstream. And, as they come to matter more to stakeholders, the spotlight shines brighter on ratings – and the organizations which create and promote them.

Phase two of Rate the Raters is designed to illuminate the breadth and depth of the ratings universe. SustainAbility inventoried over 100 ratings and their attributes, surveyed a global group of sustainability experts on their perceptions of ratings, and analyzed the results.

For a summary of key findings and recommendations, watch our video briefing above.

For further information, including in-depth analysis of good practice and a description of the evaluation process, download the full white paper from the project library.

Rate the Raters Phase Two Taking Inventory of the Ratings Universe

Uncovering Best Practices

For phase three of Rate the Raters we conducted in-depth evaluations of 21 ratings, in an attempt to shed light on this important area. The 21 ratings we focused on were a representative sample of the 100+ ratings that we inventoried in phase two.

Our phase three work revealed numerous examples of good practice, which are detailed in our report. We are starting to see efforts to reduce the survey fatigue that companies face. A greater number of raters are soliciting feedback and direction from external experts, many through formal advisory panels. And we observe a few raters opening up their black boxes to let us in on their methodologies. Yet we found many areas in need of improvement as well, and offer a number of recommendations to raters for the future.

For a summary of key findings and recommendations, watch our video briefing above.

For further information, including in-depth analysis of good practice and a description of the evaluation process, download the full white paper from the project library.

Rate the Raters Phase Three Uncovering Best Practices

The Necessary Future of Ratings

For phase four we elected to look forward, to offer our vision for the necessary future of ratings. Watch the video or download the full report to find out more.

As this is the final phase of the main program, we wanted to end with a clear call to action: We invite all ratings organisations to respond publicly by 1 January 2012 to the same short set of questions we posed to the 21 raters with whom we worked during phase three.

In making this request, we are channeling the sentiment of the many stakeholders with whom we’ve spoken during the project, who want to see the same level of transparency from raters as we all expect from the companies they rate. The questionnaire is included in our report. We commit to compiling all responses and making them publicly available in the spring of 2012.

For a summary of key findings and recommendations, watch our video briefing above.

For further information, including in-depth analysis of good practice and a description of the evaluation process, download the full white paper from the project library.

Rate the Raters Phase Four The Necessary Future of Ratings

In the fourth phase of Rate the Raters we put forth our vision for ratings in the future, which called for competition on analysis rather than data collection, greater focus on material issues and impacts, and improved transparency.

A year on we believe there remain a number of important, unanswered questions, for example around how ratings are being used by sustainability professionals and investors, and so we have embarked on a new fifth phase to explore these issues.

Phase Five will see the publication of four deliverables the first of which is available below. More information on the remaining Phase Five deliverables will be posted here shortly.

Polling the Experts 2012

Rate the Raters: Polling the Experts 2012 A GlobeScan / SustainAbility Survey The first of the deliverables is a survey exploring how sustainability experts view and use corporate sustainability ratings. We polled 850 people from over 70 countries, across multiple sectors, who have worked on sustainability matters for at least three years.

The Company Perspective

Rate the Raters, Phase Five The Company Perspective The latest white paper in our Rate the Raters series sets out to better understand how companies are using and getting value from ratings.

The Investor View

Rate the Raters, Phase Five The Investor View The latest paper in our Rate the Raters series sets out to better understand the perspectives of mainstream analysts and portfolio managers on ESG issues and ratings.

The Raters Response

Rate the Raters, Phase Five The Raters Response In the final piece of Rate the Raters Phase 5, we publish the responses from a number of sustainability raters.