GISR launches principles for rating the raters

The proliferation of corporate sustainability ratings, rankings, and indices is an old story. For years, just about everyone has griped about the sheer volume of such things, and the time, resources, and attention companies must spend on them. Currently, more than 100 sustainability ratings, ranking and indices evaluate the performance of more than 10,000 companies, using more than 2,000 different indicators.

The idea that this cacophony could be harmonized — never mind quieted — has long been an unattainable dream for companies. This week, that dream moves one small step toward reality.

The nearly two years, a nonprofit called GISR — the Global Initiative for Sustainability Ratings — has been working to create a standard for company-level sustainability ratings. It is doing this, it says, “to accelerate the integration of environmental, social and governance (ESG) issues and indicators in investment decision-making” by “building a new standard that equips investors, companies and other stakeholders with the tools to recognize true excellence in corporate sustainability.”

That is, to get Wall Street and its counterparts around the world singing from the same hymnal on sustainability.

GISR does not intend to rate companies on sustainability. Instead, it will accredit other sustainability ratings, rankings or indices that new to its principles, issues and indicators.

GISR, like the Global Reporting Initiative and Ceres, take an investor-centric perspective, with eye on how shareholder interest can move management and markets. Indeed, all three organizations are linked to the Tellus Institute, a Boston-based nonprofit research and policy organization. GISR is a joint program of Ceres and Tellus, as was GRI, which the two groups spun off as a separate organization, now based in Amsterdam.

At the center of both GRI and GISR is Allen White, vice president and senior fellow at Tellus, who directs the institute’s program on "corporate redesign." White is credited with co-founding GRI and served as its acting CEO until 2002. In 2004, he co-founded and now directs of Corporation 2020, an initiative focused on “designing future corporations to create and sustain social mission.”

This week, at the Ceres conference in San Francisco, White and Mark Tulay, the GISR program manager (and former program director at Ceres) are unveiling GISR’s first major initiative: a beta version of GISR’s 12 principles, the core attributes of a ratings framework required to achieve credibility among key stakeholders. The principles are the first step in a multi-year process of building an accreditation process that ratings organizations can begin to use.

This week, GISR also will announce that UPS and McDonald’s have committed to participate in its Supporting Stakeholder program. They join other companies that already are playing an active role in GISR's standard development process, including Bloomberg, Deloitte, Intel, Pax World, TIAA-CREF, and UBS. 

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