Connect with us

Business and Economy

Sustainability rankings don’t always identify sustainable companies

Published

on

ESG rankings and lists aren’t often entirely reliable for consumers or investors wanting to make decisions on companies they buy from or invest in. Appolinary Kalashnikova/Unsplash

British American Tobacco (famous for cigarettes), Coca-Cola (world-renowned for its sugary soft drinks) and Glencore (a British/Swiss mining company) were recently ranked in the top five most environmentally and socially responsible companies on the FTSE 100, the share index of the 100 biggest companies listed on the London Stock Exchange.

As consumers and investors, we often look at environmental, social and governance (ESG) rankings to guide our purchase, investment and employment decisions. But what should we make of this list, compiled by British investment services firm Hargreaves Lansdown?

As kids, we learned that smoking kills, yet British American Tobacco has a place at the top of the list, suggesting it’s a highly responsible company.

Obesity, cardiovascular disease and diabetes are life-threatening diseases, yet Coca Cola, a leading sugar purveyor, also has a top ranking.

Glencore is being investigated for alleged fraud offences, yet it’s No. 4 on the same list.

Meaningless?

A number of lists rank companies as being “most responsible” or the “best corporate citizens” or the “most green.”

The Corporate Knights Global 100, for example, is an annual list that evaluates companies based on their sustainability performance. Companies are given a score based on their environmental, social, governance and economic performance and then ranked from one to 100.

Newsweek magazine’s America’s Most Responsible Company list also ranks U.S. companies on their sustainability performance.

Its 2021 list ranked Citigroup as the country’s ninth most responsible firm. The bank was recently fined US$400 million by federal regulators for “unsafe and unsound banking practices.”

Microsoft is ranked third on the same list, yet earlier this year, 250 million client records were exposed online without password protection.

Procter & Gamble, 23rd on the Newsweek list, is currently being scrutinized for its reliance on trees from Canada’s northern boreal forest.

A forest with ferns and tall pine trees.
A portion of Canada’s boreal forest in Québec. Ali Kazal/Unsplash

In Canada, Corporate Knights ranks Canada’s Best 50 corporate citizens. Leading the pack is Mountain Equipment Co-op, which recently apologized for the lack of diversity in a marketing campaign that excluded people of colour.

Hydro One, in the No. 11 position, has been taken to task for its executive compensation packages.

Consumers, investors look at rankings

Increasing numbers of investors depend on ESG information from third parties for their investment decisions. Similarly, consumers are seeking sustainable products and looking to responsible firms to inform their purchasing decisions.

There are also an increasing number of companies entering the ESG rankings field. Currently there is no regulatory oversight or consistency across ranking agencies on what factors are being assessed in the rankings and who is assessing them.

As well, there are no global or nationally accepted standards or consistent requirements on what should be reported or measured for ESG performance. Companies are evaluated based on a wide range of criteria, making it challenging for consumers and investors to make fully informed decisions.

Should investors look at ESG ratings to assess their investment choices and the associated risks?

We looked at the top five Canadian firms from Corporate Knights 2020 Global 100 list and searched the Sustainalytics ESG Risk Database to see their ESG risk. Sustainalytics, a company initially launched in Canada as Jantzi Research, measures a company’s exposure to industry-specific ESG risks and how well a company is managing those risks, as well as the extent of any unmanaged ESG risk.

Three Canadian companies — the Bank of Montreal, Cascades and Canadian National Railway — were ranked as low risk, while two, Algonquin and Bombardier, which placed even higher on the Corporate Knights Global 100 list than the three aforementioned companies, are considered high risk by the Sustainalytics ESG Risk rating.

No consistency

Why would one well-known ESG ranking agency rate a company a leader while another flag it as high risk? If all the ratings and rankings are measuring ESG, we would anticipate consistency across rankings.

While rankings should help us in our quest to make better, more sustainable decisions and choose ethical companies as consumers and investors, they can be misleading and provide only a partial view of a company’s ESG commitments.

When determining which rankings to trust, we suggest looking for ranking agencies that use public information to assess companies on ESG performance. Quality ranking organizations are transparent about how they analyze companies and come up with their rankings. Those reading the lists should be able to assess the information provided in the ranking quickly and with confidence about what it really says.

Look for rankings that don’t accept payment from companies to participate; this reduces their power to influence their placement. Look at information from multiple rankings and ratings.

When companies in contested industries (those that do harm) score high in sustainability rankings, it should raise serious questions about the validity of the ranking.

Rather than blindly trusting rankings, understand the information provided by each list. While rankings are designed to offer compressed information, unfortunately, we still need to do our own research to evaluate companies.The Conversation

Rumina Dhalla, Associate Professor, Organizational Studies and Sustainable Commerce and Director, Institute for Sustainable Commerce, University of Guelph and Felix Arndt, John F. Wood Chair in Entrepreneurship, University of Guelph

This article is republished from The Conversation under a Creative Commons license. Read the original article.

xosotin chelseathông tin chuyển nhượngcâu lạc bộ bóng đá arsenalbóng đá atalantabundesligacầu thủ haalandUEFAevertonxosofutebol ao vivofutemaxmulticanaisonbethttps://bsport.fithttps://onbet88.ooohttps://i9bet.bizhttps://hi88.ooohttps://okvip.athttps://f8bet.athttps://fb88.cashhttps://vn88.cashhttps://shbet.atbóng đá world cupbóng đá inter milantin juventusbenzemala ligaclb leicester cityMUman citymessi lionelsalahnapolineymarpsgronaldoserie atottenhamvalenciaAS ROMALeverkusenac milanmbappenapolinewcastleaston villaliverpoolfa cupreal madridpremier leagueAjaxbao bong da247EPLbarcelonabournemouthaff cupasean footballbên lề sân cỏbáo bóng đá mớibóng đá cúp thế giớitin bóng đá ViệtUEFAbáo bóng đá việt namHuyền thoại bóng đágiải ngoại hạng anhSeagametap chi bong da the gioitin bong da lutrận đấu hôm nayviệt nam bóng đátin nong bong daBóng đá nữthể thao 7m24h bóng đábóng đá hôm naythe thao ngoai hang anhtin nhanh bóng đáphòng thay đồ bóng đábóng đá phủikèo nhà cái onbetbóng đá lu 2thông tin phòng thay đồthe thao vuaapp đánh lô đềdudoanxosoxổ số giải đặc biệthôm nay xổ sốkèo đẹp hôm nayketquaxosokq xskqxsmnsoi cầu ba miềnsoi cau thong kesxkt hôm naythế giới xổ sốxổ số 24hxo.soxoso3mienxo so ba mienxoso dac bietxosodientoanxổ số dự đoánvé số chiều xổxoso ket quaxosokienthietxoso kq hôm nayxoso ktxổ số megaxổ số mới nhất hôm nayxoso truc tiepxoso ViệtSX3MIENxs dự đoánxs mien bac hom nayxs miên namxsmientrungxsmn thu 7con số may mắn hôm nayKQXS 3 miền Bắc Trung Nam Nhanhdự đoán xổ số 3 miềndò vé sốdu doan xo so hom nayket qua xo xoket qua xo so.vntrúng thưởng xo sokq xoso trực tiếpket qua xskqxs 247số miền nams0x0 mienbacxosobamien hôm naysố đẹp hôm naysố đẹp trực tuyếnnuôi số đẹpxo so hom quaxoso ketquaxstruc tiep hom nayxổ số kiến thiết trực tiếpxổ số kq hôm nayso xo kq trực tuyenkết quả xổ số miền bắc trực tiếpxo so miền namxổ số miền nam trực tiếptrực tiếp xổ số hôm nayket wa xsKQ XOSOxoso onlinexo so truc tiep hom nayxsttso mien bac trong ngàyKQXS3Msố so mien bacdu doan xo so onlinedu doan cau loxổ số kenokqxs vnKQXOSOKQXS hôm naytrực tiếp kết quả xổ số ba miềncap lo dep nhat hom naysoi cầu chuẩn hôm nayso ket qua xo soXem kết quả xổ số nhanh nhấtSX3MIENXSMB chủ nhậtKQXSMNkết quả mở giải trực tuyếnGiờ vàng chốt số OnlineĐánh Đề Con Gìdò số miền namdò vé số hôm nayso mo so debach thủ lô đẹp nhất hôm naycầu đề hôm naykết quả xổ số kiến thiết toàn quốccau dep 88xsmb rong bach kimket qua xs 2023dự đoán xổ số hàng ngàyBạch thủ đề miền BắcSoi Cầu MB thần tàisoi cau vip 247soi cầu tốtsoi cầu miễn phísoi cau mb vipxsmb hom nayxs vietlottxsmn hôm naycầu lô đẹpthống kê lô kép xổ số miền Bắcquay thử xsmnxổ số thần tàiQuay thử XSMTxổ số chiều nayxo so mien nam hom nayweb đánh lô đề trực tuyến uy tínKQXS hôm nayxsmb ngày hôm nayXSMT chủ nhậtxổ số Power 6/55KQXS A trúng roycao thủ chốt sốbảng xổ số đặc biệtsoi cầu 247 vipsoi cầu wap 666Soi cầu miễn phí 888 VIPSoi Cau Chuan MBđộc thủ desố miền bắcthần tài cho sốKết quả xổ số thần tàiXem trực tiếp xổ sốXIN SỐ THẦN TÀI THỔ ĐỊACầu lô số đẹplô đẹp vip 24hsoi cầu miễn phí 888xổ số kiến thiết chiều nayXSMN thứ 7 hàng tuầnKết quả Xổ số Hồ Chí Minhnhà cái xổ số Việt NamXổ Số Đại PhátXổ số mới nhất Hôm Nayso xo mb hom nayxxmb88quay thu mbXo so Minh ChinhXS Minh Ngọc trực tiếp hôm nayXSMN 88XSTDxs than taixổ số UY TIN NHẤTxs vietlott 88SOI CẦU SIÊU CHUẨNSoiCauVietlô đẹp hôm nay vipket qua so xo hom naykqxsmb 30 ngàydự đoán xổ số 3 miềnSoi cầu 3 càng chuẩn xácbạch thủ lônuoi lo chuanbắt lô chuẩn theo ngàykq xo-solô 3 càngnuôi lô đề siêu vipcầu Lô Xiên XSMBđề về bao nhiêuSoi cầu x3xổ số kiến thiết ngày hôm nayquay thử xsmttruc tiep kết quả sxmntrực tiếp miền bắckết quả xổ số chấm vnbảng xs đặc biệt năm 2023soi cau xsmbxổ số hà nội hôm naysxmtxsmt hôm nayxs truc tiep mbketqua xo so onlinekqxs onlinexo số hôm nayXS3MTin xs hôm nayxsmn thu2XSMN hom nayxổ số miền bắc trực tiếp hôm naySO XOxsmbsxmn hôm nay188betlink188 xo sosoi cầu vip 88lô tô việtsoi lô việtXS247xs ba miềnchốt lô đẹp nhất hôm naychốt số xsmbCHƠI LÔ TÔsoi cau mn hom naychốt lô chuẩndu doan sxmtdự đoán xổ số onlinerồng bạch kim chốt 3 càng miễn phí hôm naythống kê lô gan miền bắcdàn đề lôCầu Kèo Đặc Biệtchốt cầu may mắnkết quả xổ số miền bắc hômSoi cầu vàng 777thẻ bài onlinedu doan mn 888soi cầu miền nam vipsoi cầu mt vipdàn de hôm nay7 cao thủ chốt sốsoi cau mien phi 7777 cao thủ chốt số nức tiếng3 càng miền bắcrồng bạch kim 777dàn de bất bạion newsddxsmn188betw88w88789bettf88sin88suvipsunwintf88five8812betsv88vn88Top 10 nhà cái uy tínsky88iwinlucky88nhacaisin88oxbetm88vn88w88789betiwinf8betrio66rio66lucky88oxbetvn88188bet789betMay-88five88one88sin88bk88xbetoxbetMU88188BETSV88RIO66ONBET88188betM88M88SV88Jun-68Jun-88one88iwinv9betw388OXBETw388w388onbetonbetonbetonbet88onbet88onbet88onbet88onbetonbetonbetonbetqh88mu88Nhà cái uy tínpog79vp777vp777vipbetvipbetuk88uk88typhu88typhu88tk88tk88sm66sm66me88me888live8live8livesm66me88win798livesm66me88win79pog79pog79vp777vp777uk88uk88tk88tk88luck8luck8kingbet86kingbet86k188k188hr99hr99123b8xbetvnvipbetsv66zbettaisunwin-vntyphu88vn138vwinvwinvi68ee881xbetrio66zbetvn138i9betvipfi88clubcf68onbet88ee88typhu88onbetonbetkhuyenmai12bet-moblie12betmoblietaimienphi247vi68clupcf68clupvipbeti9betqh88onb123onbefsoi cầunổ hũbắn cáđá gàđá gàgame bàicasinosoi cầuxóc đĩagame bàigiải mã giấc mơbầu cuaslot gamecasinonổ hủdàn đềBắn cácasinodàn đềnổ hũtài xỉuslot gamecasinobắn cáđá gàgame bàithể thaogame bàisoi cầukqsssoi cầucờ tướngbắn cágame bàixóc đĩaAG百家乐AG百家乐AG真人AG真人爱游戏华体会华体会im体育kok体育开云体育开云体育开云体育乐鱼体育乐鱼体育欧宝体育ob体育亚博体育亚博体育亚博体育亚博体育亚博体育亚博体育开云体育开云体育棋牌棋牌沙巴体育买球平台新葡京娱乐开云体育mu88qh88
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Maria in Vancouver

Lifestyle5 days ago

How To Do Christmas & Hanukkah This Year

Christmas 2024 is literally just around the corner! Here in Vancouver, we just finished celebrating Taylor Swift’s last leg of...

Lifestyle1 month ago

Nobody Wants This…IRL (In Real Life)

Just like everyone else who’s binged on Netflix series, “Nobody Wants This” — a romcom about a newly single rabbi...

Lifestyle1 month ago

Family Estrangement: Why It’s Okay

Family estrangement is the absence of a previously long-standing relationship between family members via emotional or physical distancing to the...

Lifestyle3 months ago

Becoming Your Best Version

By Matter Laurel-Zalko As a woman, I’m constantly evolving. I’m constantly changing towards my better version each year. Actually, I’m...

Lifestyle3 months ago

The True Power of Manifestation

I truly believe in the power of our imagination and that what we believe in our lives is an actual...

Maria in Vancouver4 months ago

DECORATE YOUR HOME 101

By Matte Laurel-Zalko Our home interiors are an insight into our brains and our hearts. It is our own collaboration...

Maria in Vancouver4 months ago

Guide to Planning a Wedding in 2 Months

By Matte Laurel-Zalko Are you recently engaged and find yourself in a bit of a pickle because you and your...

Maria in Vancouver5 months ago

Staying Cool and Stylish this Summer

By Matte Laurel-Zalko I couldn’t agree more when the great late Ella Fitzgerald sang “Summertime and the livin’ is easy.”...

Maria in Vancouver6 months ago

Ageing Gratefully and Joyfully

My 56th trip around the sun is just around the corner! Whew. Wow. Admittedly, I used to be afraid of...

Maria in Vancouver6 months ago

My Love Affair With Pearls

On March 18, 2023, my article, The Power of Pearls was published. In that article, I wrote about the history...