Sustainability Rankings: Which are real, which are rubbish?

Richard Crespin

Albert Einstein once said that not everything that counts can be measured and not everything that can be measured counts.  While I remain a dyed-in-the-wool free market capitalist, the measurement systems we’ve used to date have gotten us in a hole with disasters economic, environmental and political.

As we reconsider what “counts” in the age of sustainability, it’s important that we get it right.   And unfortunately this means suffering through a variety of sustainability rating systems.

In 2000 the world had 21 sustainability-related ranking systems; we now have more than 100.  As a result many folks now want to know how to prioritize the “real” rankings from the “rubbish”.

As Executive Director of the Corporate Responsibility Officers Association I represent you:  the responsibility and sustainability professional.  I know the difficulty different reporting regimes pose.  I also know how hard it is to rate companies because I serve on the Methodology Committee for Corporate Responsibility Magazine’s 100 Best Corporate Citizens List.  As a result, I have discerned a few hallmarks of the better rating systems.  Here’s what I can offer as a guide to prioritizing ratings:

  1. Transparency.  Their methods, criteria, and decision-making should be public. Any commercial relationships between the rater and the firms on its list should be clearly disclosed as well.
  2. Consistency.  While evaluation criteria continue to evolve, the rating should have some constancy year-over-year.  The criteria should also be applied evenly to all companies in the rated universe.
  3. Relevance.  A list should relate to your company’s industry, brand or strategy.
  4. Acceptance.  Pay more attention to lists that have broad acceptance and/or use widely accepted criteria like the Global Reporting Initiative.
  5. Prediction.  The most effective rating systems will predict future performance.  This is the “holy grail” and will likely remain elusive for at least another 10-15 years.  To be predictive a rating needs to incorporate a full business cycle’s worth of data, typically 30+ years.  No rating system that I know of has been around that long.

What do you think? Are these the right criteria for evaluating information requests? When it comes to the flood of sustainability surveys, what is your strategy for responding? Which do you respond to? Why?

 

About Richard Crespin

Richard Crespin is the Executive Director of the Corporate Responsibility Officers Association and chair of CR Magazine’s COMMIT! Forum.

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1 Comment
  1. anthonyrusso

    September 26, 2011

    It is very easy for an organization to get overwhelmed today with the ever increasing ranking systems and countless regulations that they strive to adhere to, and this can only lead to oversights and important metrics ‘slipping through’. The implementation of the correct software eases this process, but when it comes to recording metrics it is important to know exactly which metrics matter.

    Good EHS/Sustainability software will include a Metrics component designed for the purpose rather than trying to shoehorn it into another program. Trend analysis over time can assist in implementing processes to promote compliance and sustainability.

    A good vendor will offer assistance in implementing a software solution working with the company towards tracking the metrics that will be most relevant and be the most beneficial to the company, and the environment they operate in.

    Anthony Russo
    Dakota Software

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