Rankings Management

Why companies should systematically manage their presence in sustainability rankings

November 19, 21

The discussion of corporate sustainability has long been demanded primarily by large, capital market-oriented companies. However, the topic has not been ignored, but it has been difficult to obtain meaningful data on the performance of companies. With the impending Corporate Sustainability Reporting Directive of the EU (CSRD), it is clear that no company can ignore this topic and that reporting requirements will be gradually expanded. 

The number of sustainability rankings will continue to rise, and the resulting increased transparency in important sustainability indicators will lead to a further increase in the creation and publication of sustainability or ESG rankings and ratings. These compare the sustainability performance of companies and rank them. They provide guidance and a simple answer to the otherwise very complex question of which companies perform well and which perform poorly in terms of sustainability. A large part of existing sustainability ratings is not published but sold through subscription models to capital market participants, who then include the results in their investment decisions. The institutes (e.g. Sustainalytics, MSCI, ISS ESG) that create these rankings often use a variety of quantitative factors that are collected and interpreted in elaborate processes to provide a detailed picture of sustainability performance and risks.

Furthermore, AI-driven solutions are increasingly being used here. These evaluate media reports and social media to check whether what companies write in their sustainability reports stands up to the critical examination of external stakeholders. Due to the high public interest in the topic, there are now also a variety of high-circulation magazines that publish their own sustainability rankings for various reasons. Some lists are intended to exert pressure on companies and force them to improve their performance. An example of this is the Access to Medicine Index, which has been critically examining for many years whether and how the 20 largest pharmaceutical companies in the world make their products accessible to patients in low-income countries. On the other hand, other lists are more of a marketing tool behind which there is no claim to effect change.

Read the complete article from the magazine "Kommunikationsmanager" (german edition):  Warum Unternehmen ihre Präsenz in Nachaltigkeitsrankings systematisch managen sollten


Thomas Stevens
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