When activists use rankings as leverage—and how companies can handle it

On February 7 of this year, a previously unknown research institute from Berlin, the “NewClimate Institute,” published a ranking that caused a considerable stir: the Corporate Climate Responsibility Monitor 2022. It evaluated the transparency and integrity of climate targets set by major global companies. Among those examined were Deutsche Post, BMW, and Volkswagen. The stark conclusion gained widespread media coverage: “Large companies fail the test of their net-zero goals.” The ranking was prominently featured in leading media in Germany (such as Handelsblatt and Spiegel) and internationally (BBC, Financial Times). It quickly achieved attention, so much so that companies like Unilever and Nestlé felt compelled to counter the discussion through press releases. 

Simple answers to complex questions 

The Corporate Climate Responsibility Monitor is just one of hundreds of rankings published annually assessing company performance across various public interests. Usually, these rankings don’t go viral like the NewClimate Institute’s list, yet their reach is typically immense. The reason is simple: rankings reduce complexity and deliver clear, comprehensible messages. They either confirm existing perceptions or surprise. The most successful rankings often manage both simultaneously: 

• Which companies are the most innovative? 

• Which companies are the most attractive employers? 

• Which companies publish the most ambitious sustainability targets? 

Rankings provide straightforward answers to complex questions. This makes them exciting for different target groups (just a few examples): 

• Top talents seeking an employer that meets specific criteria, such as family-friendliness. 

• Investors aiming to align their portfolios sustainably but lacking the expertise or resources to perform comprehensive sustainability assessments themselves. 

• NGOs or pressure groups using rankings to highlight poor performance and gain visibility for their issues (see the NewClimate Institute). 

• Media looking to increase reach through attractive content or generate additional revenue through seals. 

Lack of systematic management approach 

While many companies are aware of the reputational importance of rankings, only a few monitor and manage rankings performance systematically. When companies fail or do poorly in rankings, it’s often due to inadequate management. Typically, management reacts only after negative headlines appear, lacking a proactive approach. Ideally, companies should seek direct dialogue with institutes, suggesting adjustments to methodologies or clarifying individual ratings. Providing additional background information from the company’s perspective is also beneficial. If this is unsuccessful, companies can publish statements on their websites. 

For an overview of corporate ranking performance, the F.A.Z.-Institute and R.A.T.E. annually publish the “Global R.A.T.E. Index,” measuring multinational corporations’ performance across 150 visible, sector-spanning rankings worldwide, particularly impactful in German-speaking regions. A complex process first identifies the most influential rankings in the world’s largest economies, including Brazil, China, Germany, France, Great Britain, India, Italy, Canada, Japan, and the USA. Rankings such as “World’s Most Admired Companies” or “Latin America’s Most Attractive Employers” are included. Results from all identified rankings are merged and aggregated through meta-ranking, creating the “Global R.A.T.E. Index.” 

Microsoft again globally number 1—SAP impresses again in DAX 

The top-ranked companies globally were Microsoft, Alphabet (Google), and Apple, followed by Amazon and Accenture, as in the previous year. Companies with consistent high rankings often have a strong competitive advantage due to their recognition (63 out of 150 rankings) and clear differentiation in performance (73 percent). SAP remains stable among the top rankings globally and within DAX. BMW follows with slightly lower presence but similar good performance (56 percent), especially strong in Europe. 

The number of rankings continues to grow—more intensive use of public data 

Rankings cover nearly all thematic areas. Due to increasing transparency demands on companies, the number of ranking publications is expected to rise further. Frequent rankings occur where business models or core long-term campaigns are sustainably aligned. More than a third of the 150 analyzed rankings measure employer attractiveness and sustainability compared to the previous year. New or significantly intensified rankings focus on “Employer,” “ESG,” and “Sustainability,” often leveraging publicly available data. In all areas, ratings independent of company input increasingly set the trend. 

Companies should adopt a proactive approach and continually monitor rankings relevant to their strategic objectives. It is essential to consider these rankings when developing strategies and corporate communications. Companies must actively manage the rankings landscape, influence methodology adjustments proactively, and integrate stakeholder feedback. 

In spring 2023, the NewClimate Institute plans a new edition of the Corporate Climate Responsibility Monitor. It is expected to stir significant attention again, especially for large companies that have engaged intensively with climate targets and communication since the last publication.