GISR to operate under principles of balance, transparency, improvement and impartiality
After a year of debate, the Global Initiative for Sustainability Ratings (GISR) has announced the four principles that will serve as the base of its accreditation decisions – ‘continuous improvement, impartiality, balance, and transparency.’
GISR, which includes the input and participation of companies such as Deutsche Bank, Bloomberg, Bayer, UBS and others, will use the four principles as the basis for accrediting sustainability indices, rankings and ratings, according to nonprofit Ceres and sustainability research firm the Tellus Institute.
‘GISR is seeking to highlight leading groups doing an excellent job of rating corporate sustainability performance, while encouraging all raters to achieve a continuously higher level of excellence,’ Allen White, vice president of the Tellus Institute and founder of GISR, says in a press release. ‘Credible systems should rest on certain common principles. Once they know which ratings systems align with such principles, we anticipate a major expansion of the ratings market worldwide.’
According to GISR, more than 100 ratings systems are currently in place worldwide that evaluate, rate or rank more than 10,000 companies using more than 400 different issues and more than 2,000 indicators. GISR plans to harmonize these practices and expand them globally, counting on the cooperation of a network of investors, companies and non-governmental organizations.
Besides the four core principles announced in the news release, GISR intends to take into account ‘incorporation of stakeholders whose investment decisions are influenced by sustainability ratings; focus on issues material to investors; inclusion of a rated company’s value chain in performance assessment; and comparability across rated companies while avoiding an overly prescriptive or rigid approach to ratings’.
GISR says that, besides its principles, it will operate under a standard also composed of indicators and issues. The issues will include subjects such as water stewardship, human rights and carbon emissions.
‘The need for standards is clear,’ Mindy Lubber, president of Ceres, says in the news release. ‘Investors are increasingly evaluating companies in terms of their ability to meet sustainability challenges and they are seeking assurance that a rating system provides an accurate picture of how well a company is building the natural, social and human capital needed to operate sustainably well into the 21st century.’
