Thursday, 24 February 2011

Report evaluates 21 sustainability ratings

Thinktank and consultancy SustainAbility has evaluated 21 sustainability ratings and found significant weaknesses in terms of both methodology and transparency. It was particularly critical of ratings systems that treat their methodology like a "secret sauce", preventing the companies rated from using the data to improve their performance. Ironically some of the companies criticised for this declare their objectives as helping the rated companies to improve their own performance and disclosure. Others were singled out for relying too much on external sources and placing too little emphasis on quality control, running the risk that they recognise the companies that spend the most on promoting their sustainability achievements, rather than those that achieve the most.

As a sustainability professional, I have personal experience of this problem and would endorse SustainAbility's findings. Two specific examples spring to mind. One is the uninvited rating where an organisation relies totally on public domain information and publishes a report which fails to uncover some of your organisation's achievements. Once the unjustifiably low rating is out there it's hard to overturn perception. And secondly, the paid-for rating system which relies on a long obsolelete standard as a key criterion, thereby preventing a new candidate from achieving maximum score even though it comfortably achieves all the other criteria.

With 80% or more of contracts for IT equipment including sustainability in their supplier evaluation (in our experience, anyway), there is increasing emphasis on sustainability ratings as a quick way of benchmarking environmental credentials. But buyers understand the limitations of the various schemes to avoid being misled. The Corporate Sustainability and Responsibility Research Voluntary Quality Standard aims to provide a seal of approval, which looks promising.

The schemes commended by SustainAbility for disclosure of methodology were: CDP, Climate Counts, FTSE4Good, GS Sustain, Global 100 and the Access to Medicine Index. Those showing good validation practices were CSRHub, FTSE4Good and Trucost.

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