Sustainability Ratings: A New System Every 42 Days

To paraphrase comic strip character Pogo, “we have met the enemy and they (may be) us.”

At least that is how many sustainability consultants, ratings organizations and sustainability-devoted companies should be feeling these days. For a field so concerned about global acceptance, consistency and transparency, sustainability has a long way to go. The problem is there are more than 100 CSR/corporate sustainability rating and ranking systems.

According to a new “Rate the Raters” white paper (available as a free download) by SustainAbility, a sustainability think tank and strategy consultancy based in New York, 87 of the 108 rating systems studied have been around less than 10 years, which means a new rating/ranking system has been introduced approximately once every 42 days over the last 10 years. There are now rating systems that rate the ratings ,and some programs create a composite, multi-rating score – it’s like college football’s BCS system, except with a whole lot more at risk for all of us.

Furthermore, the white paper reported that only a handful of ratings provide the sort of disclosure that allows users and companies to understand how the ratings are constructed – in other words, they lack transparency, which is one of the most important things that rating organizations are supposed to be looking at when doing their evaluations.

Under the heading “Responsiveness Trumps Performance,” SustainAbility reported more than 60 percent of the ratings depend wholly or in part on information being submitted directly to ratings organizations, “thereby rewarding companies with the greatest capacity to respond to ratings requests rather than those with the best performance.” It’s no wonder consumers are wary of greenwashing and many well-intentioned companies have no idea how, or if, to join the ratings free-for-all.

The commitment to building a high-performing, sustainable organization takes significant time and money. So do measuring, demonstrating and reporting progress. Industry does not have unlimited resources, or patience. It is incumbent upon the raters and rated to take a hard line toward building a consensus and common-sense standards on sustainability ratings.

Companies are being held to increasingly high standards. Those who want to set the standards need to be willing to do the same. Otherwise, they’re just pay-to-play membership organizations. Until these various systems are sorted out, we’ll all be left to wonder who’s really doing well by doing good. And who’s just good at filling out forms and aligning themselves with like-minded organizations.

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