CSR Ratings & Rankings

Your CSR reporting matters to the investors

red-boat-on-lake-mointainsCorporate Social Responsibility refers to organizations identifying and addressing their environmental, social and governance impacts on stakeholders, e.g. any party impacted by the organization’s decisions and actions. Among the stakeholders are the shareholders and investors. Indeed, the success of their investments depend on how the company acts, in economic but also social spheres. Indeed, a non-existent or unhealthy CSR management leads to risks that can affect the investors’ decisions. As a result, investors have been increasingly paying attention to companies’ CSR management and performance. This is called Socially Responsible Investment, or SRI.

Socially Responsible Investment (SRI): importance of ratings and indexes

To make their investment decision, investors need to know the sustainability performance of companies. To receive insights, they purchase the research of extra-financial or rating agencies. Such agencies rate the CSR performance of stock-listed companies based on the public information they disclose and according to methodologies that are based on the international standards. With such information, investors can take decisions. They use various strategies, including the best-in-class. Best-in-class strategy leads to various indexes like DJSI, FTSE4Good Index Series, MSCI ESG Indexes and other.

To be part of such indices, companies need to have a good score on the assessment of the rating agencies. The indices work as any regular stock exchange index, they follow the financial performance of companies. However, the composition takes into account the CSR performance of companies.

Such scores might also be reused in other questionnaires and ratings. For instance, Gartner has updated its supply chain index methodology. Now 10% of the score depend on CSR criteria and is based on public third party information.

  • Companies are rated by agencies paid by investors
  • Such scores determined access to certain indexes

Solutions for companies

What can companies do to influence such ratings?

In some cases, they can directly answer the questionnaire. This is true for CDP, and also for the DJSI index. DFGE can support you to answer such questionnaires.

Otherwise, companies’ performances will be rated by analysts on the basis of public information. Here, it is paramount that companies disclose public information. DFGE recommends disclosing the companies’ commitments in the shape of policies, and to report any action implemented and indicators under a CSR report. We can help you build a CSR report in accordance to UNGC or GRI. We can also review your policies or support you in formalizing them. In any case, we strongly recommend to be transparent on your CSR strategy, implementation and success.

Sometimes, rating agencies will also inform you and ask for more information. We would be happy to provide support to answer their questions, and for any request you might have. This is the goal of our Sustainability Intelligence approach: reuse existing information to bridge the gap between various links. We really want to take care of your CSR reporting so that you can focus on the implementation of the strategy.

You need:

  • a transparent CSR report
  • public policy
  • sound CSR reporting system

Your advantages:

  • Expertise. Since 1999, DFGE has been focused on sustainability management and reporting, and partners with the internationally recognized standards like CDP or EcoVadis.
  • Time-saving. You receive a finished solution within a short time (2 to 7 weeks). We work “iteratively and recursively”, i.e. you receive the suitable answer for your current question. In the following years these answers are checked and supplemented or extended where necessary. In this way you can demonstrate a continuous improvement process. In addition, you do not receive a multi-year consulting contract in which you have to commit yourself for years.
List of rating agencies
List of indices

Unfortunately there is no complete list of all indices available.

SRI strategies

To know more about SRI strategies, we invite you to consult the EUROSIF and USSIF resources. They are forums for SRI. They publish surveys on the state of SRI on a regular basis: http://www.eurosif.org/wp-content/uploads/2014/09/Eurosif-SRI-Study-20142.pdf