Global Initiative for Sustainability Ratings

In Brief

corporate ratings standard; change def. of value


(2011, Washington;

Rating the raters of corporate sustainability activism and engagement.  An effort by Ceres and Tellus Institute, with strong involvement from organizations like TIAA-CREF, the Calvert Group, Deloitte, and Bloomberg to bring to widespread adoption a single standard for rating sustainability performance.  Mission: “to drive transparency and excellence in environmental, social, and governance (ESG) research, ratings and indices to improve business performance and investment decision-making.”  Created as an information and knowledge management solution for companies, investors and raters to manage the volume of requests for data on sustainability companies receive, the information provided to investors and the particular orientation of raters. Has compiled data on hundreds of corporate ESG ratings, rankings and indices.  Four components to the Center for Ratings Excellence (CORE) program: 1) Framework, principles for accreditation of the rating organization; 2) Hub, an on-line data base containing “350 ESG rankings covering more than 50,000 companies on more than 500 issues and more than 10,000 ESG indicators”; 3) Labs  advancing ratings science; and 4) Convenings to share experiences and scale best practices in rating.

Principles that guide the process and content aspects of sustainability ratings: 1) Transparency: companies provide useful information that raters respect; 2) Impartiality: companies do not influence raters unduly; 3) Continuous Improvement: raters stay up to date with best practices; 4) Inclusiveness: using focus groups, surveys, workshops, and advisory committees, etc. to encompass multiple points of view; 5) Assurance: ARISTA 3.0, ISAE 3000, and AA1000 as reference points; 6) Materiality: whether exclusion of an issue, e.g., product recalls, significantly alter the decisions of a rating user; 7) Comprehensiveness: ratings specific to climate (natural-capital focused), living wages (human-capital focused), or community impacts (social-capital focused) should be attentive to linkages across the other capitals; 8) Sustainability Context: whether the rating system attends to generally accepted norms of human and ecological well-being; 9) Long-term Horizon: long-term, mid-term, and short-term activities of a company vis-a-vis sustainability; 10) Value Chain: all elements of the product/service creation process that a company has influence over; 11) Balance: using a mix of measurement techniques, e.g., quantitative and qualitative; 12) Comparability: whether a company can be compared over time to itself and to others.  Recent publication: Corporate Sustainability: First Evidence on Materiality. Cost of becoming a “core stakeholder”: $10K.   Mindy Lubber, president of Ceres, is the co-chair of GISR’s steering committee.  Co-founder, Allen White, formerly of Tellus, serves on the Technical Review Committee.  30 members of the Expert Advisors Council (EAC) advise the Secretariat and Technical Review Committee.  A Secretariat of three people directs the day-to-day activities and has primary organizational oversight. Co-chairs: Mindy Lubber and Allen White.  [NOTE: A private sector powerhouse with a lot of input from high-level actors in the sustainability world.   MS]

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