Lacking one firm global standard, firms often have to get strategic about achieving desirable sustainability scores across multiple geographies and rating entities. The stakes aren’t small, either. A top score can unlock millions in potential investments and contracts, while a bad score can wreck corporate reputations along with shutting off access to critical capital. Yet which strategies are best for achieving a fair score and ensuring full credit for green initiatives, sustainable processes, and ecologically friendly supply chains? Best, of course, is a subjective term. However, firms that consistently earn top marks from a wide variety of rankings agencies around the world provide many insights and replicable business practices. Here, some of these global success stories will be examined, with an eye toward gleaning the knowledge needed to earn and maintain top marks for sustainability no matter which group is providing a rating.
The crux of the sustainability scoring problem
According to McKinsey, the core issue with the hundreds of potential ratings, rankings, and reviews on sustainability for companies comes down to communication. When firms fail to loudly and transparently broadcast their own numbers, rating groups and ranking organizations are often left to their own devices when assigning scores. Yikes!
Of course, the entirety of the burden shouldn’t rest solely with companies. According to a July 2021 report from the International Organization of Securities Commissions (IOSCO), many ratings groups could do more to dig out data points around carbon mitigation efforts, packaging changes, supply chain sustainability, and dozens of other measurements, so that rankings would correlate more consistently between entities. Yet many ratings organizations operate under tight time constraints and limited budgets, making it difficult to find the time for follow up interviews, deep dives into corporate reports, or extensive verifications of supplier standards. As a result, the more information and transparency that companies can provide, the less variation and errors there will be in ratings and rankings.
Login Here