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June 14, 2011
Initiative Aims to Standardize Ratings of Corporate Social Responsibility
    by Robert Kropp

Ceres and Tellus Institute announce the launch of the Global Initiative for Sustainability Ratings, which aims to provide a single standard for rating the sustainability performance of companies.


Last October, in a blog post entitled It's Raining Ratings!, the Murninghan Post reported that of the 108 corporate social responsibility (CSR) ratings examined by SustainAbility in its Rate the Raters research program, only 21 existed in 2000.

Citing SustainAbility's research, the blog post noted that CSR ratings generally relied upon information submitted by the companies themselves, "thereby rewarding companies with the greatest capacity to respond to ratings requests rather than those with the best performance." The absence of industry-specific key performance indicators (KPIs) in many ratings also made meaningful comparison difficult.

Last week, Ceres and Tellus Institute, the organizations responsible for the launch in the late nineties of the Global Reporting Initiative (GRI), announced the launch of the Global Initiative for Sustainability Ratings (GISR). The goal of the new initiative, according to a press release, is "to create and bring to widespread adoption a single standard for rating the sustainability performance of companies."

"The proliferation of scores of sustainability ratings providers" has led to inconsistency, "survey fatigue" among respondents, and "cherry picking" of favorable results by companies, the release continued.

The initiative, which will be modeled on GRI, will be rolled out in two phases over the next year. The first "will systematically evaluate the quality of existing ratings programs from both a process and content standpoint," and be followed by the design of "a best-practice ratings framework as a benchmark for use by raters and ratings users."

Founding partners in the coalition include the Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), Calvert Investment Management, and Bloomberg.

Tellus Institute Senior Fellow Allen White stated, "If we arenít infusing sustainability into all ratings frameworks, both financial and non-financial, we are losing precious time in the race toward shifting markets to sustainable outcomes."

"The simply-stated goal of this system is to avoid the next BP disaster," Ceres President Mindy Lubber said.

Until last year's oil spill in the Gulf of Mexico, BP was considered a leading sustainable company, and was listed on several sustainability index series.

 

 
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