Making Sense of Rankings & Ratings: Too Much Clutter or More the Better?

by Aman Singh Das | April 20, 2011

We love rankings.

Right?

Right.

And with the plethora of rankings that have sprouted in the last few years on every possible aspect of CSR and sustainability, from Newsweek's green ranking to CRO Magazine's Best Corporate Citizens list, a conference on corporate citizenship would be incomplete without a panel on rankings.

Led by Campbell Soup's VP for CSR Dave Stangis, the panel at Boston College Center for Corporate Citizenship's (BCCCC) conference was heavily weighted on the financial side of things with IW Financial's Mark Bateman and SustainAbility's Michael Sadowski fielding questions.

[IW Financial is a consulting firm that focuses on providing environmental, social and governance (ESG) research while SustainAbility is a strategy consulting firm focusing on sustainability.]

Stangis started off by setting a plain field: What makes a good ranking? And how do companies tackle this flood of surveys?

For the most part, Sadowski and Bateman were on the same page:

1. Transparency: The raters must be absolutely transparent on their methodology for the ranking to be effective and implementable for those ranked.

2. The more sector-specific the better: When criteria become muddled with too much crossover between industries, sectors and functionalities, the overall ranking loses focus and gets lost. For Sadowski the "more issue-specific a ranking is" the better.

3. Engaging before ranking: For both panelists this was an emphatic issue. Insisting that the rankers must spend time engaging with the companies they are ranking, Bateman said this was the only way the ranked could feel a part of the process and understand what they needed to improve on. "Without this back and forth, you're not promoting dialogue," he said. Without dialogue, the companies aren't learning anything.

Stangis then turned the spotlight on the panelists: "What is driving this plethora of rankings?"

Between the two, the panelists identified the following:

1) There is increasingly the need for more accessible data.

2) Sustainability is a hot trend right now. Everyone wants to be on it regardless of whether it makes sense to them or not.

3) Globalization is encouraging regional ratings, which in turn, offer a wide array of ways to dissect and compare company performance.

Finally, asked Stangis, how do you wade through these rankings and really figure out a) Which are worth investing your time and resources in; and b) Which are realistic and really reflect the market and the companies that are making the effort?

Unfortunately, "there's just not enough money to create the kind of depth and analysis we need to have rankings that are true to every market condition," observed the panelists. And with some rankings continuing to be driven by advertising revenue, this is a hard-to-achieve goal.

Takeaway: Just like choosing what news to read based on your perspective on the topic, choose the ranking/rating that makes the most sense for your business/company. Become very good at what matters to your supply chain, your business model, your stakeholders instead of trying to accomplish every scorecard metric on every ranking table.

Make it make sense.

Previously:
The Conference Junkie: Are You Preaching to the Converted?

Filed Under: CSR


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