Ratings Revisited
In May of 2010, SustainAbility launched a multi-phase research program, Rate the Raters (RtR). RtR was designed to influence and improve the quality and transparency of corporate sustainability ratings.
It proved enormously popular. Many companies and financial industry stakeholders tell us they still regularly reference this seminal work. Now we propose to re-engage on this topic.
To explore the current ratings landscape and to better understand the need for new RtR research, SustainAbility hosted three roundtables with corporate sustainability professionals, investors, analysts and ratings representatives in the first half of 2017. The roundtables were hosted in London, New York and San Francisco. We also undertook many bi-lateral discussions with ratings stakeholders.
I need more information on what my peers and competitors are doing, which ratings they value and why.
Five years after the last RtR publication, we found that corporates still struggle with how to decide which ratings and rankings to prioritize. Corporate stakeholders are still using RtR to guide internal decision making on ratings and expressed interest in an RtR update that would more fully incorporate investor points of view on ratings. Investors point to increasing demand for ESG integration and ESG-focused portfolios; they want to know which ratings and data providers companies value and respect. And, raters attending the roundtables noted the struggles companies face with the growing number of ratings while holding firm in the belief that each and all the ratings they back provide value.
This paper outlines the themes emerging from the 2017 RtR outreach (roundtables, interviews and other bi-lateral conversations) and explores why and how the themes merit new research. It provides an immediate perspective on the state of play in the ratings arena, and the response to this paper will help us determine whether funder and partner interest is sufficient to support a comprehensive RtR update in 2018.