EDF Report Offers Perspectives on the Current State of Sustainability Ratings and Rankings and Suggestions for Improvement




EDF Report Offers Perspectives on the Current State of Sustainability Ratings and Rankings and Suggestions for Improvement

Ratings, rankings, scores, best of lists – these are increasingly important to corporate issuers and for investors

The popular CBS TV Network nighttime host David Letterman for many years provided us with periods of laughter with his well-known top 10 list segments. (Example: The Top 10 Stupid Things Americans Say to Brits.)
There’s long been a spirited competition in the corporate sector along the lines of the popular “top of” or “best of” lists (with rankings) that companies are awarded, and/or that companies pursue in the effort to garner more third party recognitions and awards.  In recent years, there’s been a steadily-increasing number of such contests focused on governance, social and environmental issues.

Popular audience “top 10” awards seem to proliferate overnight (like mushrooms in the forest) coming forth from publishers, NGOs, conference organizers, trade associations, professional membership organizations, academia, and others.  All are welcome to some degree by investors and stakeholders and can add luster to the company reputation and brand.

Indeed, here at G&A Institute we have well beyond 400 “corporate awards and recognitions” related to ESG / Sustainability identified and profiled to help client companies round out their third party awards roster with relevant, suitable recognitions of different kinds.  The competitive kinds that we’re all familiar with include Best in industry. Best workplace for women. For LGBTQ employees. Best business sector economic development contributors in the state (the Governor’s Award). Best companies for Hispanic or African-American engineers…and on and on.

Some of these types of recognitions are well known and for investors and stakeholders, welcomed signals of third party recognitions of a company’s citizenship, responsibility or sustainability / ESG progress and achievements.

Many awards began as editorial features of magazines. (In past years, members of our team worked with Fortune on a “Best Places” annual award.)  Forbes is another well-regarded business and finance publication with much-followed awards for companies (the Best Employers List; Best Employers for Diversity; Top Companies to Work For, and more).

Investor-Focused Ratings / Rankings / Scores / Leadership Lists
And then there are the all-important ratings, rankings, scores, index/benchmark selections that many more public companies are receiving from such service provider organizations as MSCI, Sustainalytics and Institutional Shareholder Services; there are many robust corporate ESG profiles in the Bloomberg platform or on Thomson Reuters’ Eikon (now, “Refinitiv” branded); and coming forth from a host of other ratings organizations in the U.S. and Europe.  These ESG data sets, and rankings / ratings are also used by many third parties in the methodology to create other awards, recognitions, indexes, and so on.  This is why it's critical for companies to engage with and improve these key ESG investor data sets and rankings as they flow down and are used by many investors and many other stakeholders.

At the top – in the board room, C-suite -- these are indeed critical recognitions and independent (to a large degree) profiles of a company’s ESG strategy, actions, achievements, and recognitions.  Of course there’s grumbling from companies about the efforts to keep up and the independent views of the raters, and how the company may be presented in the ratings work.So how do the best of these ratings pay off for the public issuer?

Consider:  In terms of ROI for their awards efforts, sustainability rankings can help companies define internal performance measures, attract top talent and link executive comp to corporate sustainability efforts…so write the authors of an essay in Forbes.

Victoria Mills and Austin Reagan of the EDF (Environmental Defense Fund) then add:  Unfortunately, there’s a significant problem with these sustainability lists.

The authors point to a new report – “The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership” – produced by EDF+Business -- which posits that: “Environmental problems like climate change will never be solved through voluntary corporate actions alone. Public policies are critical to reduce environmental impacts across the economy in an efficient and equitable manner, and on a scale commensurate with the challenges.”

The missing link, thinks EDF, is [corporate] public policy advocacy; companies can be doing more than just addressing their own ESG issues (and winning third party recognition for leadership and admirable rankings and scores from ESG raters). EDF thinks the most powerful tool companies have to fight climate change is their political influence.

The report explains EDF views on rankings vs. ratings; analysis of rankings (“all have a major blind spot”, explains EDF); the challenges of integrating climate policy advocacy into sustainability rankings; and, a series of recommendations.

The EDF opinions are sure to stimulate debate now among asset owners and managers, and within the corporate community.  We’re all hooked on sustainability / ESG rankings, ratings, scores and other opinions; they’ve become ever-more important in the decision-making of key asset managers.  So, in this brief report, EDF shares its perspective on the way forward to make corporate reporting on ESG more robust.

Click here to view the 12-page report.

This Week's Top Story

The Good, The Bad And The Blind Spot Of Corporate Sustainability Rankings
(Thursday - March 21, 2019) Source: Forbes - No matter the industry, business stakeholders care about lists – who’s on them and who’s on top. Consider this small sampling: Fast Company’s “50 Most Innovative Companies” list, Fortune’s “Change the World” list, Forbes’ “The... 

Sustainability: Continuing Forward Momentum!

Do Consumers Care About Sustainability? – Here Are Some Signs That They Do…And That Marketers Respond to Consumer Tastes and Expectations…

Eating our way to a sustainable future
(Monday - March 18, 2019) Source: Harvard Gazette - But “eating seafood” today means something different than it did just a few generations ago, Greenberg said. Instead of diets varying depending on locally available fish, recent decades have seen seafood becoming standardized...  

Buying new clothes? Here are 3 easy ways to shop more sustainably
(Tuesday - March 19, 2019) Source: Fast Company - These eco-friendly trends can help lessen the environmental impact of your clothes–but they’re far from a panacea. 

Tyson Foods and cloud-based tech: The next frontier for reaching sustainability goals
(Tuesday - March 19, 2019) Source: EDF.org - Tyson Foods – the largest meat producer in the United States and exporter of food to more than 100 nations – is stepping up in a new area: cloud-based insights that can benefit the environment, farm finances and Tyson's... 

“Integrating sustainability enhances trust in brands,” Frédéric Dreux, Unilever Prestige
(Tuesday - March 19, 2019) Source: Premium Beauty News - Enhanced recyclability, use of recycled materials or alternatives to plastic, zero waste: in its own way, every brand in the Prestige Division of the Anglo-Dutch giant (REN Clean Skincare, Living Proof, Dermalogica, Murad, Kate...

Impossible Foods Boosts Sustainability Across All Key Metrics
(Thursday - March 21, 2019)  Source: Business Wire - -Impossible Foods publishes a comprehensive life ... We constantly measure and optimize every aspect of our product — particularly taste and sustainability.” Delicious, Nutritious, Ubiquitous Earlier...

Refill Startups Go Green With Sustainable Packaging
(Tuesday - March 19, 2019) Source: pymnts.com - When cleancult Co-Founder Ryan Lupberger looked at other brands of cleaning products, he noted that the same problems always appeared to arise even with better-for-the-world offerings. “They used really heavy plastic packaging,”...  

On the B-to-B Marketing Front – Industry Trends…

Study: Responsible Sourcing Gets the Nod in Sustainable Packaging Goals
(Wednesday - March 20, 2019) Source: Environmental Leader - When it comes to sustainable packaging goals among major brand owners and retailers, more companies have made commitments relating to responsible fiber sourcing than any other area; while much has been made of recent commitments...  

Powering sustainable solutions from the little red dot
(Monday - March 18, 2019) Source: Reuters - By 2025, two-thirds of the world’s population could be living under water-stressed conditions, and by 2030 the global demand for fresh water could exceed the supply by 40 per cent, according to the United Nations. Finding... 

EU urged to support local Fair Trade initiatives: ‘We see a willingness to buy sustainable and fair’
(Friday - March 22, 2019) Source: Food Navigator - The Fair Trade Advocacy Office has called on the European Commission and European Parliament to help boost the uptake of Fair Trade at a local level, which FTAO director Sergi Corbalán says could incite the food and beverage... 

Can sustainable agriculture survive under capitalism?
(Wednesday - March 20, 2019) Source: The Week - Wealthy, educated, and cultured — and with a deep ideological commitment to sustainability — these formerly urban dwellers have migrated to rural areas, where they've been able to use savings and inheritances to purchase small... 

Sustainability professionals must shine brighter than their peers: Here's how to do it
(Wednesday - March 20, 2019) Source: GreenBiz - Here is a bit of career advice for those in environmental/sustainability professions: Be better. Yes, that’s right. This is an unfortunate reality, but you need to be better than your colleagues in the same room representing... 

...and Corporate Sustainability Actions

BSEE: Key to energy security lay within offshore safety performance, environmentally sustainable energy production
(Friday - March 22, 2019) Source: World Oil - Bureau of Safety and Environmental Enforcement (BSEE) Director Scott Angelle emphasized BSEE’s commitment to safe and environmentally sustainable energy production during meetings in Louisiana with the Greater... 

BRIT and FIVS Partner to Expand International Sustainable Winegrowing Competition and Award
(Friday - March 22, 2019) Source: Broadway World - The Botanical Research Institute of Texas (BRIT) is excited to announce a new partnership with Paris-based FIVS, a global organization designed to serve the wine, spirits, and beer sectors, to broaden and expand BRIT's unique... 

Sponsored Message


ESG Topics & Issues Headlines

Environmental regulations have become impossible to follow
(Tuesday - March 19, 2019) Source: The Hill

Opinion: Why further financial crises are inevitable
(Wednesday - March 20, 2019) Source: FT 

Bayer Stock Tumbles After Jury Finds Weed-Killer Roundup Caused Cancer
(Friday - March 22, 2019) Source: Investors.com 

US judge halts hundreds of drilling projects in groundbreaking climate change ruling 
(Thursday - March 21, 2019) Source: The Guardian


Headlines From the Corporate Sector

JPMorgan Chase is investing $350 million to get workers ready for the future
(Monday - March 18, 2019) Source: CNN

Jamie Dimon says we've split the US economy, leaving the poor behind
(Tuesday - March 19, 2019) Source: CNBC 

Investment bank Goldman Sachs wants half of its entry-level recruits to be women  
(Wednesday - March 20, 2019) Source: Chicago Tribune

AT&T peels off layer of political spending secrecy — thanks to pushy investors and the Michael Cohen fiasco
(Thursday - March 21, 2019)  Source: Dallas Morning News

Europe hits Google with a third, $1.7 billion antitrust fine
(Thursday - March 21, 2019) Source: CNN

Walmart, Sam’s Club and the Walmart Foundation Announce a Commitment of $100,000 for Midwest Flood Relief
(Thursday - March 21, 2019)  Source: CSR Wire

Smithfield Foods Donates More Than 42,000 Pounds of Protein To Second Harvest Food Bank of Metrolina
(Thursday - March 21, 2019) Source: CSR Wire

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G&A Institute Sustainability Update
Informative, insightful, thought provoking
Governance & Accountability Institute's blog focusing on the sustainable world evolving daily before our eyes. Read it, absorb it, question it and challenge.

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Focus on Green Finance – The European Union Action Plan – Mandates Being Put In Place for Fiduciaries

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The Fourth Official “Climate Science Special Report” Issued by the US Government’s “Global Change Research Program” – Projecting Critical Impacts of Climate Change on American Society in 21st Century

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