In 2010 there were 108 sustainability ratings, rankings and indexes. Today there are over 600. Corporate ESG ratings and rankings have become a sometimes frustrating, but often necessary, part of the job for many sustainability professionals. But what value do they deliver and are there ways they can improve? SustainAbility will be exploring this question through our 2018 Rate the Raters research.
In May 2010, SustainAbility launched a research program to explore, influence and improve the quality and transparency of corporate sustainability ratings. Seeing recent renewed corporate and financial industry interest in this topic, SustainAbility hosted roundtable discussions across our offices in New York, London and San Francisco to explore the current ratings landscape. Here is what we heard:
Ratings are Complex and Time Consuming, but Have Merit
Five years since our last research, corporates and investors alike are still unclear which ratings are most accurate and valuable in their work. Corporate sustainability professionals struggle with the crowded, complex, costly and time consuming nature of ratings today, but also want to ensure the right data gets to the market. Amidst this struggle, ratings still have an important role to play in driving internal and executive level engagement in ESG issues and creating change within a company. ESG data and ratings also provide a critical foundation for asset managers and investors seeking investments that meet their return criteria and are also part of creating a more sustainable future.