Ceres, an investor and environmental organization, and the Tellus Institute, a Boston-based research organization will partner on the first phase of the Global Initiative for Sustainability Ratings (GISR) to seize an urgent opportunity to create a non-commercial, generally accepted sustainability ratings framework that meets the highest standards of technical excellence, independence and transparency. Such a framework will be an indispensable contribution to accelerating the efforts of organizations to meet the great sustainability challenges of the 21st century.
According to an October 2010 report by the consultancy SustainAbility, a “growing number of companies are linking executive compensation to performance on ratings. Major mainstream asset managers are examining company sustainability performance as part of their investment decision making. And, slowly but surely, citizens and consumers are starting to wake up to these issues and are turning to ratings for actionable information. While these are all welcome developments, increased attention means ratings must be able to demonstrate that they are fair, accurate and credible.”
In announcing the GISR initiative, Ceres and Tellus said the potential of sustainability ratings “has been hampered by the proliferation of the field into scores of raters each with its own, usually proprietary, methodology; lack of transparency regarding the structure and implementation of methodologies; uneven coverage of key, material sustainability issues; inefficiencies and survey fatigue on the part of rated organizations; and, in some instances, conflicts of interest whereby raters play multiple roles in their relationship with rated organizations.”
Its organizers said GISR will work “to bring coherence, transparency and coordination to sustainability ratings” by designing a generally-accepted framework that accelerates the infusion of sustainability content into mainstream financial ratings, moves existing sustainability ratings toward a core set of principles and process/performance content and serves as a stand-alone, dynamic framework for ratings users.
More information here.